Page 692 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

Glossary 677

with the lower risk because of spreading the investment. It is also the increase in products and services
provided by an organization by expanding horizontally into new areas or vertically in the supply chain.
divestiture Disposal by company of an asset or part of business, typically through sale to another
company but could also be done as a spin-off to existing shareholders.
divestment The elimination of a part of the organization by sale or other means.
dividend Payment by the company to any owner of a share of company stock. For common stock, the
amount is typically adjusted from time to time. For preferred stock, the amount is typically preset at
time of issuance. It could be expressed as the dividend for the last or next quarter, it could be the
actual dividend paid for the past 12 months, or it could be the current quarterly dividend projected for
the next 12 months.
dividend equivalents An amount equal to a common stock dividend but paid on some other finan-
cial instrument, such as restricted stock, stock option, or phantom stock.
dividend payout ratio Dividend divided by earnings per share.
dividend reinvestment plan Purchasing additional shares of company stock through dividends
received.
dividend rights Dividend paid on stock options and/or restricted stock.
dividend yield See yield.
divisional incentive compensation plans Payments tied to results of a division within a company.
DJIA See Dow Jones Industrial Average.
D&O See director and officer liability insurance.
doctrine of constructive receipt See constructive receipt.
DOL See Department of Labor.
dollar averaging See dollar cost averaging.
dollar cost averaging By investing the same dollar amount each period regardless of the change
in the investment’s value, one increases the shares purchased when prices are low and decreases the
number of shares when the prices are high.
domestic partner A person in a committed, exclusive relationship with the employee residing at the
same address, either heterosexual or same sex.
domestic staff Personal services performed by an individual at living quarters of the executive,
including a butler, cook, and/or maid.
dot-com (.com) An organization that uses the Internet to market its e-commerce products and
services.
double dipping Collecting more than once (e.g., two or more pension payments for same service
time).
double-entry accounting Debiting the use of funds and crediting the source of those funds.
double indemnity Payment of twice the face value of a life insurance policy upon accidental death of
the insured.
double taxation The taxation twice of an item. The most common example are common stock
dividends (i.e., taxable to the recipient but not tax deductible to the company).
double-trigger contract A change of control contract that is activated only after the stated percent-
age of shares have been acquired by a third party and the individual’s duties have changed.
Dow Jones Industrial Average (DJIA) The price index of selected stocks traded on the New York
Stock Exchange for specified segments of stock calculated by the Dow Jones Company.