Page 729 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

714 The Complete Guide to Executive Compensation

retrospective payment See retrospective premium adjustment.
retrospective premium adjustment Carrier accepts a lower premium in return for company agree-
ment to reimburse up to a higher predetermined limit.
return This includes a wide variety of definitions of income in relation to a specified type of
investment.
return-of-premium life insurance See term return-of-premium life insurance.
return on assets (ROA) Net income divided by total assets.
return on capital See return on capital employed (ROCE).
return on capital employed (ROCE) Net income plus after-tax interest expense divided by capital
employed, namely, shareholder equity and long-term debt.
return on equity (ROE) Net income divided by shareholder equity.
return on investment (ROI) A wide variety of income definitions expressed as a percentage of a
specified type of investment.
return on net assets (RONA) Operating income divided by net assets.
return on sales (ROS) Net income divided by net sales.
return on shareholder equity (ROSE) See return on equity.
return on stock price See yield.
return on total capital (ROTC) Synonymous with return on capital employed (ROCE).
revenue Funds received (or promised) for products or services sold.
revenue growth Increase in sales.
revenue recognition The SEC indicates the following must exist: delivery of product or services has
occurred, price is determinable, and payment is highly probable.
Revenue Rulings Published IRS interpretations of the IRC that may be relied upon.
reverse stock split Exchanging two or more current stock shares for one new share, thereby reduc-
ing the number of shares outstanding.
reverse mortgage See jumbo reverse mortgage.
reverse vesting See early exercise.
revocable trust See living trust.
rider An amendment to an original contract altering coverage.
risk The lack of certainty.
risk capital Money that can afford to be lost.
risk-free rate of return The yield on the investment in such “safe” investments as securities of the
United States.
risk premium The amount in excess of a risk-free rate of return that reflects the degree of risk for
this particular investment.
ROA See return on assets.
ROCE See return on capital employed.
ROE See return on equity.
ROI See return on investment.
rollover The transfer of assets from one account to another.
ROS See return on sales.
ROSE See return on shareholder equity.