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Understand compensation, equity, and the decisions that shape your career.

Glossary

Cashless Exercise

A cashless exercise is a method of exercising a Stock Option where the cost of exercising, and often the associated tax withholding, is netted out of the transaction automatically rather than requiring you to pay the Strike Price out of pocket.

Glossary

Certification / Certification Date

Certification is the point after a performance period ends when the board or compensation committee formally confirms actual performance results and applies the resulting Performance Multiplier.

Glossary

Grant Date

The grant date is the date on which an equity award is officially awarded to you.

How executive comp actually works

How PSUs Work

What determines whether my PSU grant pays out at 50% or 100% or 150%?

How executive comp actually works

How RSUs Work

What happens between the day I receive an RSU grant and the day I can spend the shares?

How executive comp actually works

How Stock Options Work

What does it mean to hold a stock option and what do I actually have to do to realize value from it?

Applying what you know

How to Calculate Forfeited LTIP Value

Single answerable question: I am thinking about taking another job but I have RSUs, PSUs, and stock options at various stages of vesting — how do I figure out what I'm walking away from?

How executive comp actually works

How Vesting Is Designed as a Retention Instrument

When my company makes my LTIP vest over multiple years, rather than give it to me at the end of the year like my bonus, is that why they call LTIP "golden handcuffs"?

Glossary

Modifier

A modifier describes a role a metric can play in a PSU (or short-term incentive) design, as distinct from being the primary driver of payout.

Glossary

Negative Discretion

Negative discretion is a right many incentive plans (both short-term and long-term) reserve for the compensation committee to reduce a calculated, formulaic payout after the fact.

Glossary

Performance Period

The performance period is the defined span of time over which performance is measured for a PSU or other performance-based award before a payout is determined.

Glossary

Performance Stock Unit (PSU)

A PSU is an equity award where the number of shares is determined by whether specified performance conditions are met over a defined performance period.

Glossary

Stock Option

A stock option is a form of equity compensation that offers you the right, but not the obligation, to purchase a set number of company shares at a fixed price established at grant (known as the strike price).

Glossary

Straight-Line Interpolation

Straight-line interpolation (more commonly known as a sliding scale) is the methodology used to translate a result between levels into a payout that falls proportionally in between the corresponding percentages.

Glossary

Strike Price

The strike price is the fixed price at which you're entitled to purchase shares under a stock option plan.

Glossary

Threshold / Target / Maximum Payout

This is the set of three performance levels built into most short-term and long-term incentive plans that use performance conditions.

Glossary

Tranche

A tranche is the portion of an award that vests on a single, distinct date

Glossary

Vesting

Vesting is the process by which an executive earns ownership of an equity award.

Glossary

Vesting Schedule

A vesting schedule is the specific timeline and structure that governs when tranches (or portions of an award) vest

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