Page 731 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

716 The Complete Guide to Executive Compensation

same-day sale See cashless stock option exercise.
sample A portion of the total.
sandbagging See lowballing.
SAR See stock appreciation right and summary annual report.
savings plan See defined-contribution pension plan.
SBU See strategic business unit.
scattergram A plot of pay on the Y axis and job value on the X axis.
Schedule 13D The form that must be completed by any person who owns or acquires more than
5 percent of a company’s stock.
scheduled medical plan A maximum dollar reimbursement is prescribed for each covered expense.
scope Quantifiable factors that describe dimension of the item measured.
S corporation A corporation of fewer than 75 shareholders who have voted to be taxed in the same
manner as a partnership.
SEC See Securities and Exchange Commission.
secondary markets Where shares of stock are bought and sold through stockbrokers.
secondary offering Sale of new shares of stock for a company that has already had an initial public
offering.
Section 10(b)5 The SEC rule that states that persons outside the company who are “insiders”
cannot trade the stock while they have such restricted information.
Section 10(b)5–1 Insiders are not prohibited from stock transactions if they were part of a trading
plan established before acquiring inside information.
Section 16(a) Provision in the Securities and Exchange Act of 1934 defining insiders and their
reporting requirements.
Section 16(b) Provision in the Securities and Exchange Act of 1934 that requires insiders to hold on
to stock for at least six months before selling the stock.
Section 16(b)–3 Provision in the Securities and Exchange Act of 1934 that specifies exemptions to
Section 16(b).
Section 55 The section of the Internal Revenue Code describing the alternative minimum tax.
Section 57 The section of the Internal Revenue Code describing the items of tax preference subject
to the alternative minimum tax (Section 55).
Section 61 The section of the Internal Revenue Code describing gross income.
Section 67 The section of the Internal Revenue Code describing the 2 percent floor on miscella-
neous itemized deductions.
Section 68 The section of the Internal Revenue Code describing the overall limitation on itemized
deductions.
Section 79 The section of the Internal Revenue Code describing group term life insurance for
employees.
Section 79 plan See combination term and permanent life insurance.
Section 83 The section of the Internal Revenue Code describing when and how property transferred
for services is included in gross income.
Section 83(b) election A tax filing by the recipient within 30 days of receiving a restricted stock
award to pay taxes on the value of the date of the award. This permits the person to qualify for long-
term capital gains tax treatment on the subsequent increase when restrictions lapse.