Drafting US short- and long-term incentive and bonus agreements
Published by a LexisNexis Share Incentives expert
Practice notesDrafting US short- and long-term incentive and bonus agreements
Published by a LexisNexis Share Incentives expert
Practice notes
Employers frequently grant equity awards and cash bonuses to incentivise key employees. The first part of this Practice Note focuses on key considerations with awards that are intended to encourage a key employee to accept a position with the employer (ie, a sign-on bonus or sign-on equity awards).
The second part of this Practice Note addresses short- and long-term cash incentives to influence executives to remain with the employer and/or focus on specified performance goals.
This Practice Note is divided into the following sections:
- •
Sign-on bonuses and sign-on equity awards
- •
Short-term cash incentives
- •
Long-term cash incentives
For information on equity incentives to encourage key employees to remain with the company, see Practice Notes: Understanding types and taxation of US equity compensation, Designing a US public company equity compensation plan, and Drafting a US private company equity compensation plan.
Sign-on bonuses and sign-on equity awards
Sign-on bonuses
Sign-on bonuses most commonly occur when an employee would forfeit equity, deferred compensation, or other amounts by resigning from their current employer. In other
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Jurisdiction(s):
United Kingdom
Key definition:
Short definition
What does Short mean?
An investor is ‘short’ when the exposure to a given asset is less than the level considered neutral.
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