| |
| Glossary
of Terms - USA Context (Source:
The Corporate Library ) |
| TERM |
DEFINITION |
| A |
|
| abnormal returns |
The difference between the return on a reputation portfolio
and the return on the market index. |
| accountability |
The liability of a board of directors to shareholders and stakeholders
for corporate performance and actions of the
corporation. |
| acquisition |
Acquiring control of a corporation by stock purchase or exchange,
either hostile or friendly. |
| ADR |
A special, negotiable certificate issued by a US depository
bank which represents a specific number of shares
of stock issued in a foreign country and traded
on a US stock exchange. |
| AFL-CIO |
Voluntary federation of America's labor unions formed in 1955
by the merger of the American Federation of
Labor and the Congress of Industrial Organizations
to give America's working class a voice and
power in bringing about economic and social
reforms. |
| AGM |
A company gathering, usually held at the end of each fiscal
year, at which shareholders and management discuss
the previous year and the outlook for the future,
directors are elected and other shareholder
concerns are addressed. |
| american depository receipt |
A special, negotiable certificate issued by a US depository
bank which represents a specific number of shares
of stock issued in a foreign country and traded
on a US stock exchange. |
| American Federation of Labor - Congress of Industrial Organizations
(US) |
Voluntary federation of America's labor unions formed in 1955
by the merger of the American Federation of
Labor and the Congress of Industrial Organizations
to give America's working class a voice and
power in bringing about economic and social
reforms. |
| American Stock Exchange |
The second-largest stock exchange in the U.S., after the NYSE. |
| AMEX |
The second-largest stock exchange in the U.S., after the NYSE. |
| annual (general) meeting |
A company gathering, usually held at the end of each fiscal
year, at which shareholders and management discuss
the previous year and the outlook for the future,
directors are elected and other shareholder
concerns are addressed. |
| annual report |
An audited document issued annually by all publicly listed
corporations to their shareholders in accordance
with SEC regulation. Contains information on
financial results and overall performance of
the previous fiscal year and comments on future
outlook |
| antidilution provision |
Agreement that protects an investor from a reduction in fractional
ownership in a company in the event of a stock
split, issuance of additional stock or other
such measure. |
| antitakeover defense |
A device designed to prevent a hostile takeover by increasing
the takeover cost usually through the issuance
of new preferred shares that carry severe redemption
provisions. |
| articles of dissolution |
An official document filed with the Secretary of State of the
state of incorporation prior to dissolution
of a partnership or corporation outling the
provisions for the distribution of assets. |
| articles of incorporation |
An official document filed with the Secretary of State of the
state of incorporation outlining a corporation's
purpose, powers under state law, authorized
classes of securities to be issued and the rights
and liabilities of shareholders and directors. |
| audit report |
Statement of the accounting firm's assessment of the validity
and accuracy of a company's financial information
and conformity with accepted accounting practices. |
|
| |
| B |
| benchmarking |
A company's use of information about other firms in the same
industry used for comparisons and to set standards
and goals. |
| beneficial owner |
The individual who benefits from ownership of a security, property
or mutual fund regardless of who holds title. |
| beta |
The measurement of a stock's volatility relative to the overall
market. Statistically, it is defined as the covariance
of the returns on the stock with the market return
divided by the variance of the market return. |
| Black-Scholes equation |
An equation used to determine the value of option securities
prices based on the relationship between six variables
-- the current underlying asset price (S), the option
strike price (K), the option time-to-expiration (t),
the riskless return (r), the underlying asset payout
return (d), and the underlying asset volatility (s)
-- work together to determine the value of a standard
option. |
| board of directors |
The collective group of individuals elected by the shareholders
of a corporation to oversee the management of the
corporation. |
| board of trustees |
A group of people responsible for the oversight of a non-profit
organization |
| book value |
The value of an asset, calculated as actual cost minus accumulated
depreciation. |
| broker non-votes |
Proxies received from brokers or nominees holding shares for
a beneficial owner indicating that the broker or nominee
is not voting on a particular proposal because the
broker or nominee has not received instructions from
the beneficial owner(s) and does not have discretionary
voting power with respect to that item. |
| business judgement rule |
Rule granting directors of publicly listed companies’ immunity
from liability if their actions were executed in good
faith, using sound business judgment and exercised
with reasonable care. |
| bylaws |
A document stating the rules of internal governance for a corporation
as adopted by its board of directors. |
|
|
| C |
| California Public Employees' Retirement System |
CalPERS is the nation's largest public pension system and the
world's third largest pension system with
more than $140 billion in assets invested
in domestic and international markets. |
| CalPERS |
CalPERS is the nation's largest public pension system and the
world's third largest pension system with
more than $140 billion in assets invested
in domestic and international markets. |
| CAR |
The differences between the expected return on a stock and
the actual return. |
| cash balance pension plan |
A defined benefit plan that maintains individual employee accounts
like a defined contribution plan. |
| CBOE |
Founded in 1973, the CBOE was established for the trading of
call options on listed stock. Today it is
the second largest securities exchange in
the country and the largest options exchange
in the world. |
| CBOT |
Formed in 1948 as a central marketplace for the midwestern
grain trade, the CBOT is now the oldest and
largest futures exchange in the world. |
| Central Index Key |
A unique code used by the US Securities and Exchange Commission
(SEC) to identify corporations and individual
people who have filed disclosure with the
SEC. |
| CEO |
The chief executive officer or CEO is the highest ranking officer
of the company, and is often Chairman of the
Board as well. |
| CFO |
The corporate executive responsible for the financial planning
and record-keeping of a company |
| Chairman of the Board |
Highest-ranking director in a corporation's board of directors. |
| change-in-control arrangements |
An executive employment contract that provides the executive
with a lucrative severance package in the
event of their termination. May include a
continuation of salary, bonus and/or certain
benefits and perquisites, as well as accelerated
vesting of stock incentives and/or certain
retirement benefits. |
| Chicago Board of Trade |
Formed in 1948 as a central marketplace for the midwestern
grain trade, the CBOT is now the oldest and
largest futures exchange in the world |
| Chicago Board Options Exchange |
Founded in 1973, the CBOE was established for the trading of
call options on listed stock. Today it is
the second largest securities exchange in
the country and the largest options exchange
in the world. |
| chief executive officer |
The chief executive officer or CEO is the highest ranking officer
of the company, and is often Chairman of the
Board as well. |
| chief financial officer |
The corporate executive responsible for the financial planning
and record-keeping of a company. |
| chief information officer |
The corporate executive responsible for corporate communications. |
| chief operating officer |
The corporate executive responsible for the day-to-day management
of a company. |
| CII |
Founded in 1985, the Council of Institutional Investors (CII)
is "an organization of large public, Taft-Hartley
and corporate pension funds formed to address
investment issues that affect the size or
security of plan assets." |
| CIK |
A unique code used by the US Securities and Exchange Commission
(SEC) to identify corporations and individual
people who have filed disclosure with the
SEC. |
| CIO |
The corporate executive responsible for corporate communications. |
| class action lawsuit |
A lawsuit filed by one or more persons on behalf of a group
of individuals all having the same grievance. |
| class of shares |
Multiple shares issued by the same company of varying rights
or powers. |
| classified board |
A corporate board structure where only a portion of the board
of directors is elected each year, usually
to discourage takeover attempts. |
| code of best practice |
Guiding principles for ensuring good corporate governance to
which all publicly listed companies should
aim. |
| codetermination |
Term used to describe labor representation (employees and union
represenatives) on corporate boards. |
| collar(s) |
Combinations of put options and call options that can limit,
but not eliminate, the downside risk of a
stock holding. |
| Committee on Uniform Securities Identification Procedures |
A number consisting of nine characters (including letters and
numbers) used to uniquely identify a company
or issuer and the type of security. The CUSIP
system—owned by the American Bankers Association
and operated by Standard & Poor’s—facilitates
the clearing and settlement process of securities.
A similar system is used to identify foreign
securities (CUSIP International Numbering
System). |
| common stock |
Equity securities representing ownership in a corporation and
provides the holder with voting rights and
the right to a share of the company's residual
earnings through dividends and/or capital
appreciation. |
| common-law voting |
A voting system that allows shareholders to cast all of their
votes for a single candidate nominated for
a seat on the board of directors as opposed
to voting for a different candidate for each
available seat. |
| conglomerate |
A corporation that has diversified operations by acquiring
enterprises in various industries. |
| COO |
The corporate executive responsible for the day-to-day management
of a company. |
| corporate charter |
An official document filed with the Secretary of State of the
state of incorporation outlining a corporation's
purpose, powers under state law, authorized
classes of securities to be issued and the
rights and liabilities of shareholders and
directors. |
| corporate governance |
The relationship between the shareholders, directors and management
of a company, as defined by the corporate
charter, bylaws, formal policy and rule of
law. |
| corporation |
An entity chartered by a state to act as a single enterprise
with certain legal rights whose owners remain
separate and assume limited liability. |
| Council of Institutional Investors |
Founded in 1985, the Council of Institutional Investors (CII)
is "an organization of large public, Taft-Hartley
and corporate pension funds formed to address
investment issues that affect the size or
security of plan assets." |
| cross-shareholding |
The holding of shares between two or more publicly listed companies
that give each company involved an equity
stake in the other. Often employed as a means
of preventing unsolicited takeovers. |
| cumulative abnormal return |
The differences between the expected return on a stock and
the actual return. |
| cumulative voting |
A method of stock voting that permits shareholders to cast
all votes for one candidate. A voting system
that gives minority shareholders more power,
by allowing them to cast all of their board
of director votes for a single candidate,
as opposed to regular or statutory voting,
in which shareholders must vote for a different
candidate for each available seat. |
| CUSIP |
A number consisting of nine characters (including letters and
numbers) used to uniquely identify a company
or issuer and the type of security. The CUSIP
system—owned by the American Bankers Association
and operated by Standard & Poor’s—facilitates
the clearing and settlement process of securities.
A similar system is used to identify foreign
securities (CUSIP International Numbering
System). |
| D |
| dead-hand poison pill |
An antitakeover device designed to prevent the acquisition
of a company even if a majority of
shareholders favor the acquistion.
Dead hand poison pills can only be
removed by incumbent directors or
their chosen successors. |
| DEF 14A |
A document sent by publicly listed corporations to their shareholders
providing material information on
corporate matters subject to vote
at the annual meeting. |
| defined benefits plan |
A company retirement plan in which a retired employee receives
a specific monetary allotment based
on salary history and years of service,
and in which the employer bears the
investment risk. Contributions may
be made by the employee, the employer,
or both. |
| defined contribution plan |
A company retirement plan, such as a 401(k) or 403(b), in which
the employee chooses to defer some
amount of his/her salary into the
plan and bears the investment risk. |
| Delaware Court of Chancery |
The Delaware Court of Chancery is the forum for the resolution
of disputes involving the internal
affairs of corporations chartered
in the state of Delaware. |
| Department of Labor |
The US Department of Labor was created by federal law in 1913
to "foster, promote, and develop the
welfare of the wage earners of the
United States, to improve their working
conditions, and to advance their opportunities
for profitable employment." The DOL
is responsible for the administration
and enforcement of over 180 federal
statutes concerning the protection
of workers' rights, wages and health
and safety. |
| dilution |
The change in earnings per share or book value per share resulting
from the exercising of warrants and
stock options and the conversion of
convertible securities. |
| dilution of ownership |
A reduction in the fractional ownership of a shareholder's
stock as a result of the the issuance
of additional shares of common stock
and/or the conversion of convertible
securities. |
| director |
A person elected by shareholders to serve on the corporation's
board of directors. |
| directors and officers liability insurance (D&O) |
Professional liability coverage for legal expenses and liability
to shareholders, bondholders, creditors
or others due to actions or omissions
by a director or officer of a corporation
or nonprofit organization. |
| disclosure |
The public dissemination of material, market-influencing information. |
| dissident; dissenting shareholder |
A shareholder who objects to a proposed corporate action or
position. |
| DOL |
The US Department of Labor was created by federal law in 1913
to "foster, promote, and develop the
welfare of the wage earners of the
United States, to improve their working
conditions, and to advance their opportunities
for profitable employment." The DOL
is responsible for the administration
and enforcement of over 180 federal
statutes concerning the protection
of workers' rights, wages and health
and safety. |
| E |
| economic value added |
A financial performance measure developed by Stern Stewart
& Co. used to evaluate a company's
true profit, defined by Stern Stewart
as "the amount by which earnings exceed
or fall short of the required minimum
rate of return that shareholders and
lenders could get by investing in
other securities of comparable risk."
|
| EDGAR |
The SEC's Electronic Data Gathering, Analysis, and Retrieval
system used by all public companies
to electronically transmit required
filings and ongoing disclosure obligations. |
| Electronic Data Gathering, Analysis, and Retrieval system |
The SEC's Electronic Data Gathering, Analysis, and Retrieval
system used by all public companies
to electronically transmit required
filings and ongoing disclosure obligations. |
| empirical |
quantifiable, as in an 'empirical study', where the data and
results are both subject to mathematical
analysis |
| employee benefit plan |
A plan created or maintained by an employer or employee organization,
providing benefits to employees. The
two main types are employee pension
plans and employee welfare plans. |
| Employee Retirement Income Security Act |
Federal legislation (U.S. Code Title 29, Chapter 18, associated
Internal Revenue Code and miscellaneous
provisions) adopted in 1974 that established
legal guidelines for private pension
plan administration and investment
practices including regulations relating
to plan funding, participation, vesting,
termination, disclosure, federal tax
treatment and fiduciary responsibility
of plan administrators. |
| employee stock ownership plan |
A trust established by a corporation for the allocation of
stock to its employees as a form of
employee benefit. |
| ERISA |
Federal legislation (U.S. Code Title 29, Chapter 18, associated
Internal Revenue Code and miscellaneous
provisions) adopted in 1974 that established
legal guidelines for private pension
plan administration and investment
practices including regulations relating
to plan funding, participation, vesting,
termination, disclosure, federal tax
treatment and fiduciary responsibility
of plan administrators. |
| ESOP |
A trust established by a corporation for the allocation of
stock to its employees as a form of
employee benefit. |
| EVA |
A financial performance measure developed by Stern Stewart
& Co. used to evaluate a company's
true profit, defined by Stern Stewart
as "the amount by which earnings exceed
or fall short of the required minimum
rate of return that shareholders and
lenders could get by investing in
other securities of comparable risk." |
| event study |
Empirical study of the prices of an asset prior to and directly
following a specific event, like an
announcement, merger, or dividend. |
| executive director |
A member of a company's board of directors who is also an employee
of the company. |
| externalization |
The offsetting of costs onto society at large, as in the externalization
of costs related to the health care
impact of tobacco related products
onto the public at large. Externalized
costs do not appear on earnings statements
or balance sheets, but nevertheless
may impact the sustainability of the
firms earnings. |
| F |
| fair disclosure |
The release of all material, market-influencing information
to the public at the same time. |
| FASB |
A professional standards board created by accountants to establish
standards of financial accounting
(Generally Accepted Accounting Principles
(GAAP)) and reporting in the private
sector. The FASB is officially recognized
as authoritative by the Securities
and Exchange Commission. |
| FDI |
Investment of foreign assets directly into a domestic company's
structures, equipment, and organizations.
It does not include foreign investment
into the stock markets. |
| fiduciary |
An individual, corporation or association entrusted with legal
authority and duty to manage and invest
assets for another party. |
| fiduciary trust/responsibility |
The power entrusted to a individual, corporation or association
(fiduciary) to manage assets for another
person (principal) beneficial to his/her
interests. |
| Financial Accounting Standards Board |
A professional standards board created by accountants to establish
standards of financial accounting
(Generally Accepted Accounting Principles
(GAAP)) and reporting in the private
sector. The FASB is officially recognized
as authoritative by the Securities
and Exchange Commission. |
| financial statement |
A written report that quantitatively summarizes the financial
status of an organization for a stated
period of time. Includes an income
statement and balance sheet describing
the flow of resources, profit or loss,
and the distribution or retention
of profits. |
| Focus List |
The California Public Employees' Retirement System (CalPERS)
annual list of underperforming companies
whose poor long-term stock performance,
corporate governance practices and
economic value-added (EVA) evaluation
provide the focus for the pension
fund's corporate governance activism. |
| foreign direct investment |
Investment of foreign assets directly into a domestic company's
structures, equipment, and organizations.
It does not include foreign investment
into the stock markets. |
| Form 10K |
An audited document issued annually by all publicly listed
corporations to their shareholders
in accordance with SEC regulation.
Contains information on financial
results and overall performance of
the previous fiscal year and comments
on future outlook. |
| Form 10Q |
A report filed quarterly in accordance with SEC regulations
containing unaudited financial statements. |
| Form 8K |
Form filed by corporations with the SEC to report corporate
changes or material events which are
important to investors and not previously
disclosed in any other form. |
| forward looking statement |
A statement made by an official representative of a corporation
concerning future earnings potential
or operations. |
| friendly takeover |
A takeover favored and supported by the management of the target
company |
| G |
| GAAP |
A set of uniform accounting rules for recording and reporting
financial information as established
by the Financial Accounting Standards
Board. |
| GASB |
An accounting standards board formed in 1984 by the Financial
Accounting Foundation (FAF) to develop
accounting standards for state and
local governmental entities. |
| Generally Accepted Accounting Principles |
A set of uniform accounting rules for recording and reporting
financial information as established
by the Financial Accounting Standards
Board. |
| GIGN |
The GIGN is an informal network of international institutional
investors who share a common interest
in good corporate governance and improving
long-term shareholder value. |
| Glass-Steagall Act |
Federal legislation passed in 1933 that separated investment
and commercial banking firms and prohibited
banks from owning corporate stock. |
| Global Institutional Governance Network |
The GIGN is an informal network of international institutional
investors who share a common interest
in good corporate governance and improving
long-term shareholder value. |
| golden bungee (cords) |
A lucrative executive pay package that includes a severance
agreement and cash, options, or other
incentive to remain associated with
the company. Usually included as a
provision in an executives employment
contract that is triggered as a result
of a merger or buyout. The executive
reaps the benefits of a farewell package
but retains a position with the newly
combined company. |
| golden handshake |
A clause in an executive employment contract that provides
the executive with a lucrative severance
package in the event of their termination.
May include a continuation of salary,
bonus and/or certain benefits and
perquisites, as well as accelerated
vesting of stock options. |
| golden hello |
A cash payment or other remuneration paid to a new executive
as an incentive to join a company |
| golden parachute |
A clause in an executive employment contract that provides
the executive with a lucrative severance
package in the event of their termination.
May include a continuation of salary,
bonus and/or certain benefits and
perquisites, as well as accelerated
vesting of stock options. |
| Government Accounting Standards Board |
An accounting standards board formed in 1984 by the Financial
Accounting Foundation (FAF) to develop
accounting standards for state and
local governmental entities. |
| greenmail(ing) |
The practice of taking a stake in a company subject to a hostile
takeover, forcing the target company
to buy back its own shares at a premium
to prevent a takeover. |
| H |
| historical cost |
An accounting principle requiring all financial statement items
to be based on original cost. |
| hostile takeover |
An unsolicited takeover not supported by the management and
board of directors of the target company. |
| I |
| IAS |
Financial reporting standards created by the International
Accounting Standards Committee in
an effort to harmonize various practices
across the globe |
| IASC |
An independent, accounting body formed in 1973 whose mission
is to harmonize accounting principles
used by private sector businesses
and organizations around the world. |
| ICGN |
The International Corporate Governance Network (ICGN), founded
in 1995, is a formal network of investors,
companies, academics, and finance
experts created to provide a forum
for communicating ideas regarding
the development of global corporate
governance practices. |
| ICI |
Founded in 1940 as the national association of the American
investment company industry, the Investment
Company Institute (ICI) seeks to educate
the public about the investment company
business, guard the ethical integrity
of the industry, and promote the interests
of fund shareholders. |
| independent director |
A person elected by shareholders to a corporation's board of
directors who is not affiliated with
the company in any other capacity. |
| individual investor |
An individual who purchases generally small amounts of securities
for his or her own account. Also known
as a retail investor. |
| individual retirement account |
A retirement savings account that allows individuals to set
aside up to $2,000 per year, with
earnings tax-deferred until withdrawals
begin at age 59 1/2 or later. |
| initial public offering |
The initial sale of stock by a company to members of the public. |
| inside director |
A member of a company's board of directors who is also an employee
of the company. |
| insider trading |
Buying or selling corporate stock by an insider, or an insider's
disclosure of insider information |
| institutional investor |
A large organization, such as a mutual fund, pension fund,
bank, investment company, brokerage
firm, endowment fund, university or
insurance company, that invests its
own assets or those held in trust
either as its primary business or
as an important secondary function. |
| interlocking directorates |
Two or more corporate boards of directors that share at least
one director in common. |
| internal audit |
An ongoing evaluation of a company's financial health by by
its own employees. |
| Internal Revenue Service |
The federal agency responsible for administering and enforcing
the Treasury Department's revenue
laws, through the assessment and collection
of taxes, determination of pension
plan qualification, and related activities. |
| International Accounting Standards |
Financial reporting standards created by the International
Accounting Standards Committee in
an effort to harmonize various practices
across the globe. |
| International Accounting Standards Committee |
An independent, accounting body formed in 1973 whose mission
is to harmonize accounting principles
used by private sector businesses
and organizations around the world. |
| International Corporate Governance Network |
The International Corporate Governance Network (ICGN), founded
in 1995, is a formal network of investors,
companies, academics, and finance
experts created to provide a forum
for communicating ideas regarding
the development of global corporate
governance practices. |
| International Organization of Securities Commissioners |
The International Organization of Securities Commissioners
is a network of international securities
commissions or similar organizations
involved in the development and enforcement
of securities regulation. The group
was formed to help facilitate communication
between securities regulators in an
effort to harmonize international
securities standards and to promote
high standards of regulation and integrity
in world securities and futures markets.
Membership is strictly limited to
government securities regulatory bodies. |
| Intra vires |
Relating to an action within the proper authority or power
of a corporation or corporate officer
as stated in the corporate charter.
(Latin for "within the power.") |
| Investment Company Act of 1940 |
Federal legislation passed to regulate investment companies
including regulations relating to
reporting requirements, securities
pricing and fund allocation. |
| Investment Company Institute |
Founded in 1940 as the national association of the American
investment company industry, the Investment
Company Institute (ICI) seeks to educate
the public about the investment company
business, guard the ethical integrity
of the industry, and promote the interests
of fund shareholders. |
| Investor relations |
Process by which a corporation communicates with its shareholders
and the investment community. |
| Investor Responsibility Research Center |
The Investor Responsibility Research Center (IRRC) is a not-for-profit
institution whose mission is to provide
impartial research on issues of corporate
governance, shareholding, and other
social issues worldwide. |
| IOSCO |
The International Organization of Securities Commissioners
is a network of international securities
commissions or similar organizations
involved in the development and enforcement
of securities regulation. The group
was formed to help facilitate communication
between securities regulators in an
effort to harmonize international
securities standards and to promote
high standards of regulation and integrity
in world securities and futures markets.
Membership is strictly limited to
government securities regulatory bodies. |
| IPO |
The initial sale of stock by a company to members of the public. |
| IRA |
A retirement savings account that allows individuals to set
aside up to $2,000 per year, with
earnings tax-deferred until withdrawals
begin at age 59 1/2 or later. |
| IRRC |
The Investor Responsibility Research Center (IRRC) is a not-for-profit
institution whose mission is to provide
impartial research on issues of corporate
governance, shareholding, and other
social issues worldwide. |
| IRS |
The federal agency responsible for administering and enforcing
the Treasury Department's revenue
laws, through the assessment and collection
of taxes, determination of pension
plan qualification, and related activities |
| J |
| Jensen index |
An index that uses the capital asset pricing model to determine
whether a money manager outperformed
a market index. |
| Jensen's alpha |
A comparison of a given company's market performance to that
of other company's experiencing similar
market risks. |
| K |
| keiretsu |
An alliance among suppliers, intermediaries, and other firms
that operate vertically and horizontally
and are centered around a financial
entity. |
| L |
| LBO |
Takeover of a company using a significant amount of borrowed
money, usually 70% or more of the
total purchase price. |
| leveraged buyout |
Takeover of a company using a significant amount of borrowed
money, usually 70% or more of the
total purchase price. |
| lockup restrictions |
Provisions included as part of the initial public offering
process or included in executive stock
or stock option based compensation
schemes that restrict the terms for
future sale of shares of a publicly
listed company. |
| London Stock Exchange |
The London Stock Exchange is the UK's leading stock exchange
and the most international of all
stock exchanges worldwide with over
500 foreign (non-UK) companies listed. |
| LSE |
The London Stock Exchange is the UK's leading stock exchange
and the most international of all
stock exchanges worldwide with over
500 foreign (non-UK) companies listed. |
| M |
| Merger |
The combination of two or more entities through a purchase
acquisition or a pooling of interests.
Differs from a consolidation in that
no new entity is created from a merger. |
| Meta analysis |
A statistical technique that allows researchers to correct
for various statistical artifacts
and to aggregate results across studies
to obtain an estimate of the true
relationship between two variables |
| Minority shareholder |
A shareholder whose total share ownership in a publicly listed
company is less than 50%. |
| Monetization trades |
Strategies used by executives to limit the risk of holding
a big position in a single stock by
converting part of their holdings
into cash without selling a single
share. |
| N |
| NAIC |
Non-profit organization created to assist investors in creating
or joining investment clubs and educate
the public about investing. |
| NASD |
A self-regulatory securities industry organization of broker/dealers
in the over-the-counter securities
industry. Responsible for the operation
and regulation of the NASDAQ stock
market and over-the-counter markets. |
| NASDAQ |
A computerized trading system established by the NASD for over-the-counter
stocks. |
| National Association of Investors Corporation |
Non-profit organization created to assist investors in creating
or joining investment clubs and educate
the public about investing. |
| National Association of Securities Dealers |
A self-regulatory securities industry organization of broker/dealers
in the over-the-counter securities
industry. Responsible for the operation
and regulation of the NASDAQ stock
market and over-the-counter markets. |
| National Association of Securities Dealers Automated Quotations
system |
A computerized trading system established by the NASD for over-the-counter
stocks. |
| New York City Employees' Retirement System |
NYCERS is the public pension system for all New York City employees. |
| New York Stock Exchange |
The oldest and largest stock exchange in the U.S., located
on Wall Street in New York City. |
| no-action letter |
An SEC letter sent in response to a written request for clarification
of the legality of an activity saying
that no civil or criminal action will
be taken against an individual engaging
in the specific activity questioned. |
| non-executive director |
A person elected by shareholders to a corporation's board of
directors who is not affiliated with
the company in any other capacity. |
| non-voting common stock |
Shares of common stock that do not provide the owner with the
right to vote on corporate matters. |
| NYCERS |
NYCERS is the public pension system for all New York City employees. |
| NYSE |
The oldest and largest stock exchange in the U.S., located
on Wall Street in New York City. |
| O |
| OLS |
The standard linear regression procedure used to analyze associations
between a continuous dependent varialbe
and either categorical or continuous
independent variables. |
| Option |
An agreement, or privilege, which conveys the right to buy
or sell a specific security or property
at a specified price, by a specific
date. |
| Ordinary least squares |
The standard linear regression procedure used to analyze associations
between a continuous dependent varialbe
and either categorical or continuous
independent variables. |
| Outside director |
A person elected by shareholders to a corporation's board of
directors who is not affiliated with
the company in any other capacity. |
| P |
| P/E Ratio |
The relationship between a company's earnings and its share
price, calculated by dividing the
current share price of a stock by
its earnings per share for a twelve
month period. |
| Pay-for-performance |
Term used to describe compensation concept whereby one's pay
is directly related to the company's
performance. |
| Pension fund |
A fund consisting of money contributed by the employer and/or
the employees, plus earnings to provide
pension benefits to retired employees
of a corporation, government entity,
or to other organizations. |
| Pension plan |
A qualified benefit plan set up by a corporation, government,
labor union, or other organization
to pay retirement benefits to its
employees. |
| Pensions and Welfare Benefits Administration |
Formerly known as the Pension and Welfare Benefits Program,
the Pension and Welfare Benefits Administration
(PWBA) is a sub-cabinet position under
the Department of Labor. It is responsible
for administering and enforcing the
fiduciary, reporting and disclosure
provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
|
| Poison pill |
A device designed to prevent a hostile takeover by increasing
the takeover cost usually through
the issuance of new preferred shares
that carry severe redemption provisions. |
| Pooling of interests |
A merger accounting method where the balance sheets of the
two merging companies are combined
line by line without a tax impact. |
| PRE 14A |
A preliminary proxy statement officially notifying shareholders
of matters to be voted upon at the
company's annual shareholder meeting. |
| Preferred stock |
Equity securities representing ownership in a corporation with
preferential rights over others in
regard to the payment of dividends
and distribution of assets upon liquidation.
Preferred stock usually does not carry
voting rights. |
| Price-to-earnings ratio |
The relationship between a company's earnings and its share
price, calculated by dividing the
current share price of a stock by
its earnings per share for a twelve
month period. |
| principal shareholder |
Shareholder owning 10% or more voting stock in a publicly listed
company. |
| private corporations |
A company whose shares are not traded on the open market. |
| private equity |
Equity capital investments in privately held, non-quoted companies. |
| Privatization |
The repurchasing of some or all of a company's outstanding
stock by employees or a private investor. |
| Prospectus |
A legal document published by a corporation in accordance with
SEC regulations detailing the history,
financial status, activities and future
plans of the corporation with regard
to specific securities offerings. |
| Proxy |
A ballot by which shareholders can submit their votes on proposed
corporate actions without physically
attending the annual meeting. |
| Proxy battle |
Strategy used by an acquiring company in a hostile takeover
attempt whereby the acquirer challenges
the target company's management and
solicits support from the target company's
shareholders for proposals that would
effectively give the acquiring company
control of the target without having
to pay a premium. |
| Proxy fight |
Strategy used by an acquiring company in a hostile takeover
attempt whereby the acquirer challenges
the target company's management and
solicits support from the target company's
shareholders for proposals that would
effectively give the acquiring company
control of the target without having
to pay a premium. |
| Proxy statement |
A document sent by publicly listed corporations to their shareholders
providing material information on
corporate matters subject to vote
at the annual meeting. |
| Prudent man rule |
An investment standard that dictates the type of security,
or specific securities, in which a
fiduciary/trustee may invest money.
Generally, it implies that a fiduciary/trustee
may invest in a security only if it
is one that a prudent man of discretion
and intelligence would buy. |
| Public corporations |
A company which has issued securities through a public offering
and whose shares are traded on the
open market. |
| PWBA |
Formerly known as the Pension and Welfare Benefits Program,
the Pension and Welfare Benefits Administration
(PWBA) is a sub-cabinet position under
the Department of Labor. It is responsible
for administering and enforcing the
fiduciary, reporting and disclosure
provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
|
| Q |
| quarterly report |
A report filed quarterly in accordance with SEC regulations
containing unaudited financial statements. |
| R |
| Real Estate Investment Trust |
An organization, similar to an investment company, which invests
in real estate loans (mortgages and
trust deeds) and/or has equity interests
in real estate. |
| red herring prospectus |
Investment/finance industry jargon for a preliminary prospectus
issued to gauge interest in a prospective
security offering. |
| regression analysis |
A statistical technique used to find relationships between
variables for the purpose of predicting
future values. |
| REIT |
An organization, similar to an investment company, which invests
in real estate loans (mortgages and
trust deeds) and/or has equity interests
in real estate. |
| replacement costs |
The amount it would cost to replace an asset at its current
price. |
| retail investor |
An individual who purchases small amounts of securities for
his or her own account. Also known
as an individual investor |
| return on assets |
A measure of a company's profitability; equal to a fiscal year's
earnings divided by its total assets,
expressed as a percentage. |
| return on equity |
A financial ratio that measures of a firm's return on shareholder
investment, equal to a fiscal year's
after-tax income (after preferred
stock dividends but before common
stock dividends) divided by book value,
expressed as a percentage. |
| return on investment |
A financial analysis ratio that measures an investor's return
on investment, equal to a fiscal year's
net income divided by common stock
and preferred stock plus long-term
debt. |
| right to vote |
The right of holders of common stock to vote on matters of
corporate policy at a corporation's
annual meeting. |
| risk management |
The process of analyzing a corporation's exposure to risk and
determining how to best handle such
exposure. |
| ROA |
A measure of a company's profitability; equal to a fiscal year's
earnings divided by its total assets,
expressed as a percentage. |
| ROE |
A financial ratio that measures of a firm's return on shareholder
investment, equal to a fiscal year's
after-tax income (after preferred
stock dividends but before common
stock dividends) divided by book value,
expressed as a percentage. |
| ROI |
A financial analysis ratio that measures an investor's return
on investment, equal to a fiscal year's
net income divided by common stock
and preferred stock plus long-term
debt. |
| S |
| Schedule 13D |
Report filed with the SEC disclosing beneficial ownership of
certain registered securities |
| Schedule 13G |
Abbreviated form of schedule 13D limited to use by banks, insurance
companies, broker/dealers |
| SEC |
Federal agency created under the Securities Exchange Act of
1934 to regulate the securities industry.
The SEC enforces, among other acts,
the Securities Act of 1933, the Securities
Exchange Act of 1934, the Trust Indenture
Act of 1939, the Investment Company
Act of 1940 and the Investment Advisers
Act. |
| Securities Act of 1933 |
Federal legislation (U.S. Code Title 15, Chapter 2A) that requires
companies making a public offering
of securities to file registration
statements with the Securities and
Exchange Commission disclosing material
business and financial information
before offering securities to the
public. |
| Securities and Exchange Commission |
Federal agency created under the Securities Exchange Act of
1934 to regulate the securities industry.
The SEC enforces, among other acts,
the Securities Act of 1933, the Securities
Exchange Act of 1934, the Trust Indenture
Act of 1939, the Investment Company
Act of 1940 and the Investment Advisers
Act. |
| Securities Exchange Act of 1934 |
Federal legislation that created the Securities and Exchange
Commission, outlawed manipulative
and abusive practices in the issuance
of securities, required registration
of stock exchanges, brokers, dealers,
and listed securities, and required
disclosure certain financial information
and insider trading. |
| selective disclosure |
The release of relevant, material, market influencing information
to a select group of people. |
| severance pay |
Compensation given to a terminated employee. |
| share repurchase plan |
The buying back of previously issued shares by a corporation
in the open market, typically indicating
management belief that the stock price
is undervalued. |
| shareholder |
A person or entity that owns shares of stock in a corporation
or mutual fund. |
| shareholder activism |
The practice of taking action to effect change in publicly
listed companies for the benefit of
its shareholders. |
| shareholder activist |
A group or individual that takes action in an effort to influence
management and effect change in the
behavior of corporations to increase
shareholder value. |
| shareholder proposal |
A recommendation or requirement, proposed by a shareholder
holding at least $2,000 market value
or 1% of the company's voting shares,
that the company and/or its board
of directors take action presented
for a vote by other shareholders at
the company's annual meeting. |
| shareholder resolution |
A recommendation or requirement, proposed by a shareholder
holding at least $2,000 market value
or 1% of the company's voting shares,
that the company and/or its board
of directors take action presented
for a vote by other shareholders at
the company's annual meeting. |
| shareholder rights plan |
A device designed to prevent a hostile takeover by increasing
the takeover cost usually through
the issuance of new preferred shares
that carry severe redemption provisions. |
| SIC Codes |
Four-digit code used by the Securities and Exchange Commission
to categorize and identify a company's
type of business. |
| socially responsible investing |
An investment strategy that seeks to achieve social as well
as a financial return, usually by
investing companies that function
ethically. |
| SRI |
An investment strategy that seeks to achieve social as well
as a financial return, usually by
investing companies that function
ethically. |
| staggered board |
A corporate board structure where only a portion of the board
of directors is elected each year,
usually to discourage takeover attempts. |
| stakeholder |
Any group or individual that has an interest in a company. |
| Standard Industrial Classification Codes |
Four-digit code used by the Securities and Exchange Commission
to categorize and identify a company's
type of business. |
| statutory voting |
Method of shareholder voting in which shareholders cast all
their votes either for or against
each individual candidate nominated
for the board of directors. |
| stock |
A certificate of ownership in a corporation granting equity
interest and a claim on a proportionate
share in the corporation's assets
and profits. |
| stock options |
An agreement, or privilege, which conveys the right to buy
or sell a specific security or property
at a specified price, by a specific
date. |
| stock purchase plan |
An employee benefit plan that provides for the allocation of
some of a company's stock for purchase
by its employees. |
| stock split |
An increase in the number of outstanding shares of a company's
stock through a division, such that
proportionate equity of each shareholder
remains the same but with a proportionately
lower market value per share. |
| stockholder |
A person or entity that owns shares of stock in a corporation
or mutual fund. |
| sustainability |
The ability of a community or society to develop a strategy
of economic growth and development
that continues to function indefinitely
within the limits set by ecology and
is beneficial to all stakeholders
and the environment. |
| T |
| Taft-Hartley Act |
Federal legislation that amended the National Labor Relations
Act of 1935 to include a definition
of unfair labor practices, grant individual
employees the right to sue union or
company officials for unfair labor
practices, restrict closed shops and
prohibit secondary boycotts. |
| Teachers Insurance and Annuity Association - College Retirement
Equities Fund |
TIAA-CREF is the premier pension system among education and
research institutions in the U.S and
is the largest portable pension system
in the world with $232 billion in
total assets under management. |
| TIAA-CREF |
TIAA-CREF is the premier pension system among education and
research institutions in the U.S and
is the largest portable pension system
in the world with $232 billion in
total assets under management. |
| Ticker symbol |
An abbreviation used to identify a security traded in the public
marketplace. |
| Tobin's Q |
A measure of a firm's performance by dividing the current market
value of assets by their replacement
costs. |
| Toxic securities |
Convertible securities whose exercise price is tied to the
market price of the underlying security
at time of conversion. Referred to
as “toxic” as it has the potential
to cause excessive dilution of the
value of common stock. |
| Trades Union Congress |
Founded in 1868, the Trades Union Congress is the formal representative
body for the UK's labor force and
includes 70 different unions in its
membership. The TUC is the official
representative for British workers
in international bodies, such as the
EU, and works to develop policies
and influence government on workplace
issues. |
| Transparent market |
A market in which there is open communication between stakeholders,
investors and company officials and
current trade and quote information
is readily available to the public. |
| TUC |
Founded in 1868, the Trades Union Congress is the formal representative
body for the UK's labor force and
includes 70 different unions in its
membership. The TUC is the official
representative for British workers
in international bodies, such as the
EU, and works to develop policies
and influence government on workplace
issues. |
| U |
| Ultra vires |
An action outside the proper authority or power of a corporation
or corporate officer as established
in the corporate charter. (Latin for
"beyond the power.") |
| V |
| Variable reset convertibles |
Convertible securities whose exercise price is tied to the
market price of the underlying security
at time of conversion. Referred to
as “toxic” as it has the potential
to cause excessive dilution of the
value of common stock. |
| Venture capital |
Funds granted to startup firms and small businesses with exceptional
growth potential in exchange for ownership
or control of the business. |
| Voting trust |
A trust created by an agreement among shareholders to transfer
legal title to their stock and voting
rights to a trustee for a specific
tiime period. |
| W |
| Welfare and Pension Plans Disclosure Act |
Federal legislation passed in 1958 requiring pension plan administrators
to file a plan description with the
Labor Department for all plans covering
25 or more participants. |
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