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Incentive compensation is a form of variable compensation in which a salesperson's (or other employee's) earnings are directly tied to the amount of product they sell, the success of their team, or the organization's success.
Incentive pay is a type of wage or salary payment that is made to employees in addition to their normal wages or salaries. Incentive pay is designed to motivate employees to work harder or to achieve specific goals. It can take the form of individual bonuses, group bonuses, or profit sharing payments.
Incentives like restricted stock-based packages and cash bonuses ? awarded to employees after reaching certain long-term goals or staying on at the company for specified time frames ? are examples of long-term incentive compensation.