Page 740 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

Glossary 725

tax assistance Preparation of income tax returns and possibly advice on investment opportunities
such as tax shelters.
taxation The mandatory transfer of money from individuals and organizations to finance government
expenditures.
tax avoidance Legal action to minimize tax paid.
tax basis The cost of an asset for purpose of reporting taxable gain.
tax credit An expense that may be subtracted from taxes due.
tax deduction An expense that may be subtracted from income for tax purposes.
tax deferred Income taxed when received rather as accrued.
tax equalization Method whereby an expatriate is income-tax neutral, that is, paying neither more
nor less than if in home country.
tax evasion Illegal action to minimize taxes paid.
tax haven A country offering a more favorable tax basis than the home country of nonresidents.
tax preference income (TPI) The unrealized gain on incentive stock options and various tax
shelters that must be included with ordinary income after a number of deductions (such as real estate
taxes and state income tax) have been added back. The adjusted tax preference income sum is subject
to an alternative minimum tax. See alternative minimum tax.
tax-qualified plan See qualified plan.
Tax Reduction Act employee stock ownership plan (TRAESOP) This form of ESOP provided a
tax credit to the company.
tax shelter Investment that creates losses to offset taxable income or defer taxes on income generated.
Teachers Insurance Annuity Association-College Retirement Equities Fund (TIAA-CREF)
The dominant pension system for educators in the United States.
tender offer An offer to purchase another company’s securities at stated price reflecting an increase
over current market value.
termination benefits See severance pay.
term insurance Benefits payable only if insured event occurs during the specified period of time.
term limit The restriction of the number of terms a director may serve on the board; a term may
range from one to three years.
term return-of-premium life insurance Payment of all premiums after stated period of time (e.g.,
30 years) without interest if the insured is still alive. If death occurs prior to the date, the face value of
the policy is paid (without any return of premiums).
testament trust A trust created by person’s will.
testator Individual who makes a will.
theory X View that people do not like work, lack ambition, and avoid responsibility—attributed to
Douglas McGregor.
theory Y View that people like work, are ambitious, and seek responsibility—attributed to Douglas
McGregor.
theory Z View that employees respond to job security and advancement opportunities—attributed to
William Ouchi.
third-country national Person from home country working in host country for an organization
located in a third country.
360 review Ratee is reviewed by subordinates, peers, and managers.
threshold The lowest payment above zero for a stated level of minimum performance.