CEO PAY

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CEO PAY
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CEO PAYTERMS TO KNOW

• Salary
• Money paid out to the CEO for the fiscal year.
• Bonus
• Additional money paid out to the CEO for the
  fiscal year, typically based on CEO performance
  that year.

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CEO PAY Terms to know

• Long Term Incentive Payouts
• A long-term incentive payout is cash or stock
  paid to the CEO for achieving a specified
  performance goal over a period longer than a
  year. Typically, performance goals include the
  financial performance of the company or the price
  of the companys stock.

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CEO PAY Terms to know

• Stock Option Grants
• Stock options give an executive the right to
  purchase company stock in the future at a
  predetermined price, know as the strike or
  exercise price.
• Stock options generally become exercisable at
  staggered intervals and expire after five or ten
  years.

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CEO PAY Terms to know

• Stock Option Grants, continued
• Stock options are only valuable if the market
  price of the companys stock exceeds the
  (original, earlier) strike price of the option.
  
• However if the market price of the share is less
  than the strike price, the stock options have
  no value.

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Stock Options example

• For example
• an executive is awarded 100 stock options at an
  original strike price of 10 a share.
• the current market price is 20 a share.
• then the executive could buy 100 shares at 10 a
  share, collecting the 10 difference between the
  strike price and the market price for each share
  or a total of 1000.

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CEO PAY Terms to know

• Restricted Stock Awards
• A restricted stock award is a grant of shares to
  the CEO by the company.
• Typically, the CEO is subject to restrictions,
  such as being unable to sell or transfer the
  stock for a specified period of time.
• In addition, under some plans, the CEO may lose
  the stock award if employment is terminated
  during the restricted period.

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CEO PAY Terms to know

• Other compensation
• the value and perks and other benefits provided
  to the CEO.
• This could include
• company cars and airplanes,
• country club memberships,
• tax reimbursements,
• insurance plans or
• payments to saving plans.

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CEO PAY Terms to know

• Value of Exercisable Options
• This represents the value of stock option grants
  that a CEO is eligible to exercise, but s/he
  chooses not to in the current fiscal year.

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CEO PAY Terms to know

• Value of Unexercisable Options
• Unexercisable options are option grants that have
  not yet vested.
• For example, this would include options that a
  CEO has held for two years but whose terms
  require three years to pass before the options
  are available.