Page 716 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

Glossary 701

multiple coefficient of determination The degree of variation (between 0.0 and 1.0) of the
dependent variable to the independent variables.
multiple correlation coefficient The degree to which data points in a multiple regression analysis
fall on a straight line as measured by the square root of the multiple coefficient of determination.
multiple-priced premium stock option A nonstatutory stock option that has option prices
adjusted by time and/or events.
multiple regression See regression analysis.
multiple regression analysis The comparison of more than two independent variables.
muni See municipal bond.
municipal bond Bond offered by a city or state government for general or specific purposes whose
interest is exempt from federal taxes.
mutual company An organization owned by its customers.
mutual fund A portfolio of stock, bond, or money market instruments in which investors buy shares.

NACD See National Association of Corporate Directors.
naked bear A person not possessing the shares sold short.
naked option Buying a put option without owning the shares of stock.
naked short selling Shorting a stock without borrowing the shares is typically a violation of
securities law.
named executive officers The five highest-paid people whose compensation appears in the
company proxy statement.
NASD See National Association of Securities Dealers.
NASDAQ See National Association of Securities Dealers’ Automated Quotation System.
NASPP National Association of Stock Plan Professionals.
National Association of Corporate Directors (NACD) An independent not-for-profit member-
ship organization devoted exclusively to improving corporate board performance.
National Association of Securities Dealers (NASD) Created in 1938 by an act of Congress, NASD
is responsible for setting and monitoring professional standards of brokerage houses and stockbrokers.
National Association of Securities Dealers’ Automated Quotation System (NASDAQ) An over-
the-counter stock market with trades executed over a computer network without a physical presence
like the New York Stock Exchange.
National Market System The electronic link of eight major U.S. markets enabling availability of
best price.
negative correlation Inverse relationship of two values.
negative discretion formula A formula whose resulting value is reduced by the discretion of
the compensation committee. Since the payout amount is not greater than a shareholder-approved
formula, it should be able to meet Section 162(m) requirements.
negatively skewed A distribution on the X axis with the mode greater than the median, which in turn
is greater than the mean.
negotiable instrument Securities and other instruments of value whose title is transferred at
delivery without challenge.
nepotism Preferential treatment in hiring and promoting relatives.
net assets Total assets minus current liabilities.
net current assets Current assets minus current liabilities.