Page 696 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

Glossary 681

evergreen stock authorization A plan funding mechanism that automatically restores shares used
from the plan, typically on an annual basis.
excess integration method Applies one benefit rate for all earnings up to the social security tax base
and another, higher figure for earnings above the base.
excess parachute plan An amount in excess of one-time person’s base amount if total payment is in
excess of Section 280G of the IRC.
excess plan See ERISA excess plan and restoration plan.
exchange rate The relationship of one currency to another.
exchange ratio The ratio of company A’s stock to company B’s stock in a stock-for-stock merger or
acquisition.
exchange-traded funds (ETFs) An investment vehicle consisting of preselected, preweighted
securities and other investment vehicles. Often traded as a single stock on an exchange.
excise tax A tax for failing to comply.
ex-dividend See without dividend.
execution Completion of an order (e.g., buy stock).
executive A person of high corporate standing as defined by salary, job grade, key position, job title,
and/or reporting relationship.
executive dining room An on-site sit-down facility where rooms may reflect organizational level
by differing in size, elegance of furnishings, type of crystal and china, level of cuisine, and choice of
beverages.
executive officer An executive who is an elected officer of the company.
executive perquisites See perquisites.
executive search firms Organizations hired by companies on either a retainer or contingency fee
arrangement to find the most qualified person for an open position.
executive succession award Recognition of a smooth transition with identified successor.
executive washroom This can range from a facility shared by several to one unique to an individual
(such as the CEO), including a shower in addition to the basic facilities.
exemption Excused from having to comply.
exercisable Stock option that may be exercised (i.e., the stock under option may be purchased).
exercise The purchase of stock under option.
exercise-and-hold stock option Typically this includes the award of restricted stock at time of exer-
cising the stock option, requiring that such stock be retained for a stated period of time before the
restrictions are removed from the stock award.
exercise backdating Reporting that a stock option was exercised at an earlier date when the stock
price was lower than on actual date of exercise (thereby reducing tax liability).
exercise cost method Number of stock options to be granted is determined by multiplying pay by
an assigned multiple and dividing the product by the share price.
exercise period The dates during which a stock option may be exercised.
exercise price See option price.
expatriate A temporary assignment outside of home country.
expectancy theory The view that individuals will act in accord with what it is believed those actions
will mean in future pay.
expense budget The allocation of dollars for business use, typically defined by category (e.g.,
supplies, business travel, and executive incentive pay).