Employee shall be paid a Net Profit Bonus which shall be calculated as 2. This Bonus is non - discretionary and shall be paid to Employee regardless of personal or company performance. This bonus shall be paid no later than March 15th in the year after it is earned. Subject to the New Division meeting the thresholds in Section 4.
The initial net profit bonus will be calculated for the year ended December 31 , Each such Annual Bonus shall be paid no later than the end of the third month of the fiscal year next following the fiscal year for which the Annual Bonus is awarded, unless Executive shall elect to defer the receipt of such Annual Bonus. Cash Bonus Executive shall be entitled to a fraction of any Cash Bonus for the fiscal year of the Company within which Executive's termination of employment occurs which, based upon the criteria established for such Cash Bonus, would have been payable to Executive had he remained employed through the date of payment, the numerator of which is the number of days of such fiscal year prior to his termination of employment and the denominator of which is three hundred and sixty-five ;.
Any such bonus shall be based upon the compensation principles of the Company in effect at the time the CEO determines and the Compensation Committee approves the amount of any bonus to be awarded, and except as expressly set forth in Section 7 hereof, Employee shall not be eligible to receive an annual bonus for any calendar year unless Employee remains employed with the Company through December 31 of the applicable calendar year and through the date on which such bonus is approved by the Compensation Committee, provided, however, that in any event, if Employee is terminated with Cause or resigns without Good Reason, or is given or gives notice of either, no bonus will be due thereafter under any circumstance.
For the avoidance of doubt, Employee acknowledges and agrees that it has no contractual right under this Agreement to any annual bonus payment or any target bonus percentage, and that any bonus that is paid to Employee shall be at the sole discretion of the CEO and the Compensation Committee.
Better yet, we give you more good ideas in this post besides a cash bonus! The income tax withholding requirements on bonuses can be confusing. The check would look like this:. Not so fast; the IRS also considers gift certificates to be wages if they are redeemable for general merchandise. Provided infrequently : Giving a gift certificate once per year at the holidays is infrequent. Not an administratively convenient process! Does the IRS allow employers to give anything to employees that is excluded from wages???
Fortunately the answer is yes! Here are a few ideas from the U. You may also send employees flowers, fruit, books or similar gifts under special circumstances such as illness or outstanding performance. One organization we work with has a photographer come in each year to do family portraits. The first 8 X 10 picture is free. The photographer charges for additional photos with a percentage going back to the organization. An activity like this could be a nice addition to a holiday party for staff and their families.
If an employee who was due two shares of the bonus pool is severely underperforming, you shouldn't hesitate to trim their shares to send them a clear message. Conversely, if you have a superstar employee on the front lines, you might want to allocate them more of the bonus pool to reward them for their hard work. Remember, the goal of the profit sharing or bonus plan is to reward employees for their contributions to the overall bottom line success of the business--it's not an entitlement program.
But, it is provides a clear way for the team to understand what the potential bonus is, if they do a good job and that is way better than a pure management judgment plan.
So, when you create the plan, explain how it works and that the better the company performs, the more the best performing employees will profit from that success as well.
This will likely mean that you'll have to be more transparent with your financial results. Top Stories. Top Videos.
Getty Images. Each step involves a separate set of decisions that you, as the leader, need to resolve. Equal distribution based on salary. Sponsored Business Content.
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