Page 703 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

688 The Complete Guide to Executive Compensation

grace period Time interval after payment is due before payer will be judged to be in default.
grandfather clause Does not apply to individuals or events prior to date of change.
grant Issuance of a stock award or stock option.
grant date The date on which a stock award or stock option is given to a person.
grant-date accounting A term in APB 25 that permitted fixed (rather than variable) accounting if
fair market value of the equity, employee price, and number of shares was known on the date of the
grant.
grant multiple The number multiplied by salary (or total annual compensation) and divided by stock
price to determine the number of stock options.
grantor The individual who established the trust, as well as who identifies the trustee and
beneficiaries.
grantor trust An unsecured promise to pay. See also rabbi trust.
grant price See option price.
grant rate See run rate.
green circle A person paid below the structural pay minimum for the job.
greenlight As a merger is finalized, the message given to an executive that the counterpart in the
other company will get the job and therefore he or she should begin seeking employment elsewhere.
greenmail Payment to a threatening takeover company in exchange for a promise not to attempt
another takeover for a specified period of time.
green shoe An agreement with underwriters that they can buy a stated percentage of company shares
at IPO price during the first months of trading.
gross domestic product (GDP) The total price for all goods and services produced within a stated
period.
gross margin Income after subtracting the direct costs of goods sold. This definition is often used
for subdivisions of an organization (e.g., a manufacturing division on site) where other expense deduc-
tions do not apply (e.g., selling expenses).
gross margin ratio Net sales minus cost of goods sold, with the remainder divided by net sales.
gross national product (GNP) Gross domestic product plus total price for all goods and services
produced outside the country.
gross sales Total sales before any allowance or discounts.
gross-up Increasing the amount of pay to offset tax impact.
group bonus An award based on the performance of a group, with the amounts distributed equally
or in relation to individual performance.
group incentive See group bonus.
group insurance The same health care or life insurance plan applying to a number of people,
typically all within a company.
group term insurance Coverage until individual leaves company or the contract expires (traditionally
renewed annually), whichever comes first.
group universal life insurance contract Term insurance with a cash fund that can be used to
produce ordinary life insurance and/or accumulate interest tax free.
growth stage The second stage in the market lifecycle. It is marked with tremendous growth as the
company explodes from the threshold stage.
growth stock A stock in the growth stage of the market cycle and therefore increasing faster than
others.