Page 736 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

Glossary 721

springing rabbi trust An unfunded rabbi trust that is funded upon a change of control in the
company.
spring-loading Granting a stock option shortly before announcing news likely to increase the price
of the stock.
sprinkle trust Distribution of assets from the trust at stated intervals or prescribed ages of
beneficiaries.
staggered board See classified board.
stakeholder Person or organization with a financial interest in the organization. Typically, these
include executives, other employees, customers, the community, suppliers, and shareholders.
stalking horse Review of announced acquisition actions before deciding own bid or early submission
of a candidate by a search firm to verify job specifications.
Standard & Poor’s An investor service that gives ratings to corporation debt services.
Standard & Poor’s (S&P) 500 An index of 500 widely held stocks, used as an indicator of stock
market movement.
standard deviation Variation from the arithmetic mean. One standard deviation equals 68.26 percent
of all data, two standard deviations equals 95.46 percent, and three standard deviations equals
99.73 percent of all data.
standard industry fair level (SIFL) A formula used by companies in determining the value of
personal use of the corporate aircraft resulting in an amount roughly equal to first-class airfare.
standard error of estimate Variation from line of regression, similar to standard deviations.
One standard error of estimate equals 68.26 percent of all data, two standard errors of estimate equals
95.46 percent, and three standard errors of estimate equals 99.73 percent.
standstill agreement Acquiring company’s commitment not to purchase additional stock of the
company being acquired for a stated period of time.
stapled finance Pre-packaged terms of financing offered to potential buyers of a company.
stapled stock option An option attached to an existing grant for the same number of shares. If
granted at time of a spin off, it is for the fair market value of the spun-off company stock. Exercise of
the two grants must be simultaneous.
stated number of shares method Number of stock options or awards based on organizational level
to determine individual grant.
stated percentage of total shares Number of stock options or stock awards for an individual based
on assigned percentage of total shares available.
statutory benefits Benefits described in the Internal Revenue Code.
statutory plan See qualified plan.
statutory stock options Stock options that are described in the Internal Revenue Code (Section 422)
having a tax benefit of not being taxed when exercised, only when sold.
start-up The first stage in a company’s development; its birth, followed either by growth or death.
See threshold stage.
step progression analysis The array of single regression analysis values from high to low, account-
ing for the extent of correlation.
step-up integration method See excess integration method.
STI See short-term incentive.
stick rate Percentage of individuals who remain in new position for a reasonable period of time.
stock An ownership position in an asset (e.g., company).