Page 712 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

Glossary 697

liquidation The process of converting investments to cash or the dissolution of a company.
liquidity The amount of money one is able to get quickly. For companies this is short-term assets
minus short-term liabilities and is called working capital.
listed stock Company stock trading on a specific stock exchange.
living benefit See viatical settlement.
living trust A revocable trust to which the person transfers all or part of his or her own assets.
living will A document answering questions about a person’s medical care treatment should the
person be unable to make such decisions later due to incapacitation.
LLC See limited liability company.
load The one-time fee charged either up front or when money is taken out of a mutual fund.
load fund A fund that charges a load or commission.
loading Pulling forward sales and/or expenses to current period. Opposite of backending.
loan A debt obligation incurred in exchange for cash or equivalent.
local national Paying a person on the basis of where the person works.
lock-up agreement Under change of control, the stipulation that while all grants become vested, the
executive agrees to hold the acquired shares for a stated period of time.
lock-up period The time period following an IPO during which stocks cannot be sold by insiders.
long-term assets See noncurrent assets.
long-term care Custodial care for those unable to take care of themselves.
long-term debt ratio Long-term debt divided into shareholder equity.
long-term deferral Delay in receiving amount due beyond a year.
long-term disability Period of absence from work beyond a year caused by nonoccupational illness
or injury.
long-term incentive A payment based on a performance period of more than one year, typically
three to five years.
look-around basis See peer ratings.
look-back basis See historical basis.
look-back feature Ability to lower current requirement (e.g., price) if earlier number is lower. This
is a common feature of many employee stock purchase plans.
look-forward basis See future basis.
lowballing Underestimating realistic targets. Also called sandbagging.
low-interest loan A debt obligation charging less than market rate (e.g., prime) interest.
LSAR See limited stock appreciation right.
LTI See long-term incentive.
lump-sum merit Payment of all or part of a merit pay increase in a single, one-time payment rather
than adding it to the base salary.
lump-sum payment Payment of full account balance in cash and/or stock.
major medical insurance Protection of large-scale medical expenses that are not covered by the
basic medical plan.
majority voting Election based on a majority of all votes including those withheld. See plurality
voting.