Page 710 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

Glossary 695

late-career crisis Belief after age 50 that no future promotional opportunities exist.
late retirement Retirement after normal age of retirement.
lead director Member of the board of directors who chairs meetings of the board in the absence
of the chairman of the board. Unlike a presiding director the lead director position is typically not
rotated.
lead directors Point of contact for outside directors who also run meetings in absence of the board
chair.
lease The contractual obligation to pay for the use of property owned by another party.
leaseback The leasing to the seller of the item sold.
leased employee Individual employed by leasing company who does work for another company.
least square method A statistical formula resulting in a line of best fit for a scattergram; that is, the
values above the line are not only equal to the values below the line, but the sum of their squares from
the line represents the lowest deviation from the line.
leave bonus See golden boot.
leave of absence Authorized period of absence from the workplace with or without pay.
leaving money on the table Shortfall in search firm fee if person hired receives more first-year pay
than was estimated when setting fixed fee. Setting fee based on a percentage of pay avoids this problem.
legacy benefit See charitable bequest.
legacy grant See charitable bequest.
legal assistance Service provided through insurance contract or direct company payment for legal
advice and a range of services.
legal services plan See legal assistance.
legal tender Currency that must be accepted in settlement of an amount owed.
legend Statement on stock certificate stating terms and restrictions.
length of service bonus Payment for each additional period of service.
LESOP See leveraged employee stock ownership plan.
letter of credit An order issued from a bank to pay a named person up to a stated amount of money.
letter ruling See private letter rulings.
letter stock Stock of the parent company that is limited to the performance of a business unit with-
in the company. Also called target or tracking stock.
leverage To increase one’s effectiveness, such as using debt to increase investment ability.
leveraged buyout A takeover by one company of another using the latter’s assets as collateral for the
borrowed money.
leveraged employee stock ownership plan (LESOP) An ESOP (see employee stock ownership
plan) in which the company borrows money using company stock.
leveraged stock option A company match (at least in part) of a stock option exercised and retained.
leverage ratio Extent to which funds are provided by creditors, measured by dividing shareholder
equity by long-term debt. The lower the ratio, the higher the use of borrowed capital.
leverage recapitalization The buyback of a large portion of equity by the company using debt.
liability A debt owed.
lien See mechanics lien.
lifecycle See market lifecycle.