Compensation terms for admins

Terms related to Compensation positions, settings, and events.

FYI: This module is available only for accounts that have purchased the Compensation management module. To learn more, see Compensation management.

Event details

Determine who will participate in the event and compensation review types.

Base salary
The initial amount of money an employee can expect to earn before additional compensation.
Cash awards
Lump sums of money awarded, either occasionally or periodically, for good performance, paid in addition to base salary.
Component
A part of the compensation package such as Base salary and Bonuses.
OTE
On-target earnings measure the total compensation or potential earnings if all targets are met.

Cash award types

By variable plan
The payment of the Cash Award is based on actual achievements. It can be assessed according to company, department, individual productivity, or a combination.
One-time
A lump sum of money awarded to people, either occasionally or periodically, for good performance and is paid in addition to base salary.

Equity grants

Equity grants are used for retention incentives for the mid-to-long term by giving employees opportunities for shares or stock in the company.

Event approver
The final approver from the dropdown menu. There can only be one Event approver, usually the CEO, CPO, or CFO, but can be anyone in the company.
Options
Employees’ right to buy or exercise shares at a predetermined price with certain conditions. Conditions could include the employee’s vesting schedule and a qualifying event on the company's end, such as an acquisition or initial public offering (IPO) from private to public ownership.
RSU
Restricted stock units of company stock held by employees at a pre-set price that automatically become actual shares based on the vesting schedule (usually after a defined period).
Stock award
Stock options, RSUs, and other compensation types. When an employee receives a stock award, they will get actual company shares upon hiring or after a defined period.

Event components

Award date
The date on which the approved compensation changes will go into effect.
Award period
The start and end dates of the period for which the Cash Award will be awarded.
Compensation reviews
These are the contractual compensation components, and planners suggest changes to peoples’ existing compensation packages.
Exercise plan
The price an employee pays the company for shares purchased when exercising options.
Grant date
The date on which the company's board of directors approves the equity grant.
Guidelines
One or more employee attributes, e.g., Site, Department, Employment type, Status, etc., to create your company’s guidance for planners. To learn more about employee attributes, see Set up employee fields.
Option expiration
The date reflecting when you can no longer exercise your options.
Prorate by FTE
The Cash Award is prorated based on participants’ FTE % throughout the selected lifecycle statuses.
Prorate by lifecycle
Prorate proposed Cash Awards according to employees' lifecycle statuses in the Cash Award period.
Vesting schedule
The time in which employees earn their grants.
Vesting start date
The date from which the vesting schedule starts. This date can be retroactive to the Grant date.
Vesting term
The overall vesting period.

Planners & worksheets

There are three roles involved in planning and reviewing the compensation event, in addition to the event admin who creates the event and the final event approver.

Planners Co-planners Reviewers
Planners are the main people working on the worksheet. They are the first to evaluate directly and suggest compensation changes for the participants in their worksheets and are typically direct or indirect reports. Planners select co-planners to make and review compensation recommendations for people in the event. Planners decide on the recommendations for their participants.

Worksheet alerts

Benchmark
These alerts are activated if you enable benchmark data when setting up Talent info. They let your stakeholders know if their recommendations fall below or above benchmark guidelines and the compensation ratio target.
Eligibility
Alerts stakeholders if a participant’s eligibility does not align with a compensation recommendation.
Error
Alert activated when a recommendation doesn’t align with the worksheet, and Planners cannot submit the worksheet until they rectify the error within the worksheet.
Guidelines
These alerts are activated if you enable Guidelines when setting up Components. They let your stakeholders know if their recommendations fall below or above the guidelines initially set.
Maximum recommendation
Alerts stakeholders if their recommendation exceeds the maximum recommended %, as defined.
Warning
Alert activated when a recommendation doesn’t align with the worksheet. Planners can still submit worksheets with warnings.

Notifications

Approval
Notifications will be sent to planners and reviewers once a worksheet is approved.
Invitation
Notifications will be sent to all planners and co-planners–if selected.
Reminder
Notifications will be sent to planners and reviewers that have not submitted their worksheets.

Equity terms for admins

Cliff
When the first portion of your equity vests. This is the time from the vesting commencement date when the first tranche will vest.
Equity type
A piece of the company that's assigned value.
Frequency
How often the vesting takes place and is accumulated.
Grant number
A unique number assigned per equity grant. This number can't be repeated and is a safeguard, as the number assigned will serve as an identifier when searching for and importing data.
Grant type
Initial is based on start date, and merit is based on accomplishments.
Interval
The frequency at which the options or other equity types vest.
Term
The period in which the entire vesting happens counted in months.
Time from commencement date
The amount of time that has passed from the start date of the vesting schedule and all proceeding intervals.
Total % Vested - cumulative
The cumulative percentage of options in the tranches that have already been vested. The last entry will equal 100% as it represents the culmination of the grant.
To learn more, see Set up a vesting schedule.
Tranche#
The preset number of portions that make up your entire equity.
% Vested
The percentage of options that are vested in this tranche out of the entire grant quantity.
Vesting schedule
The time in which employees earn their grants.