Page 701 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

686 The Complete Guide to Executive Compensation

for-profit company An organization formed to make a profit.
founders stock Stock awards and/or options given to employees of start-up companies before
the IPO.
401(h) plan See Section 401(h) plan.
401(k) plan See Section 401(k) plan.
403(b) plan See Section 403(b) plan.
404(c) plan See Section 404(c) plan.
412(i) plan See Section 412(i) plan.
415 limits See Section 415.
419(a) plan See Section 419(a) plan.
457 plan See Section 457 plan.
fraud Damage resulting from deliberate misrepresentation.
Freddie Mac See Federal Home Loan Mortgage Corporation.
free cash flow Cash from operations minus outlays for capital expenditures.
freestanding stock appreciation right (SAR) A cash appreciation right not connected to a stock
option.
fringe benefits See employee benefits.
front-end bonus A payment at the beginning rather than end of a period of service. Most common
use is in conjunction with an employment offer including cash equivalent of forfeited payment. See sign-
on bonus.
funding Setting aside money or buying insurance to provide for future liability.
funding formula A mathematical calculation determining the aggregate award available for distribu-
tion based on financial performance. See shareholder protection formulas.
funeral leave Time off with pay following death of a member of the family.
FUTA See Federal Unemployment Tax Act.
future basis A look-forward to project results.
future option A contract that stipulates the delivery of an item at a stated date for a specified price.
See call option and put option.
future overhang See overhang.
futures An instrument stipulating date and amount to be sold.
future value The estimated value at a future point in time with a specified rate of annual gain.
future-value method The number of stock options to be granted is determined by dividing desired
future dollar value by the estimated gain in the price of the stock over the period.

GAAP See Generally Accepted Accounting Principles.
gainsharing A group incentive plan with the decreases in costs shared by the company and the
workers.
game theory Guidance on probable actions based on situational analysis leading to a desirable
outcome.
garnishment A court order requiring the employer to deduct a stated amount from an employee’s
pay and deliver to a specified creditor.
gatekeeper Individual or organization charged with making decisions as the designated point of
contact.