Bonus

Glossary

Banking

Bonus

A bonus is the discretionary amount paid to corporate and bank executives and employees over and above their fixed salaries. In the investment banking world, bonuses were traditionally a multiple of salaries. Following the global financial crisis, caps have been placed on bonuses. In Europe, bonuses can only be 100% of salary or, with shareholder approval, 200%. Bonuses are usually paid in a combination of cash and deferred stock. They are now subject to clawback (malus) if material adverse events occur subsequent to award.

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