Page 704 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

Glossary 689

guarantee A payment not dependent on performance. See front-end bonus.
guaranteed bonus Typically a first-year-only guarantee of a minimum amount bonus to make hiring
easier.
guaranteed income contract See guaranteed investment contract.
guaranteed investment contract An investment vehicle that guarantees the rate of the return for the
period of the contract, but does not guarantee that the amount (or the principal) will be paid.
guarantor An individual or organization that takes responsibility for repayment of a loan if the
borrower does not meet the payment requirements.
guardian A person (with authority from a court) who acts on behalf of another (identified as a “ward”)
because the person is not capable of acting on his or her own behalf.
haircut provision Forfeiture of a portion of an accrued balance, perhaps tied to an earlier than
scheduled payout.
halo rating Everything is good because of one good rating.
hardship allowance Additional pay for difficult living conditions.
hardship withdrawal Early payment from a deferred benefit to meet a financial crisis. Penalties for
early withdrawal may be suspended or made less punitive.
health-care benefits See medical insurance.
health-care power of attorney Individual appointed to make health-care decisions because of a
person’s incapacitation.
health insurance See medical insurance.
health maintenance organization (HMO) Medical service is provided to a patient from a list of
authorized doctors and hospitals.
health reimbursement account (HRA) Tax-exempt plan funded by employers for payment of
employee and retiree medical expenses.
health savings account (HSA) A portable employee savings account funded by employer or
employee for medical expenses.
hedge fund A private investment fund that makes considerable investment in unconventional
instruments with the objective of making significant profits.
hedging The purchase of a forward derivative contract to reduce, if not totally, eliminate gains or
losses (typically on foreign currencies).
heir Individual who inherits property.
highly compensated employee Defined by the Internal Revenue Code and affecting coverage of
employee benefit programs.
high-yield bond See junk bonds.
hiring bonus See front-end bonus.
histogram A frequency distribution method; also called a bar chart.
historical basis A look back to the past.
historical cost accounting Expressing values based on original cost, not replacement cost.
historical method (stock options) See historical value of stock option grants.
historical value of stock option grants Bases the number of shares on the gains realized from
previous stock option grants.
HMO See health maintenance organization.
hold harmless agreement An agreement not to hold a party responsible for damages.