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Incentive compensation is simply additional money, or rewards of value (i.e. stock), paid to employees based on their performance, and on top of their base salary. The performance measures companies use to structure these comp plans can vary widely.
Washington State has no income tax. That means income from Social Security, pensions and retirement accounts is all tax-free in Washington. Sales tax rates are quite high and property tax rates are about average. To find a financial advisor who serves your area, try our free online matching tool.
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.
The Washington State Renewable Energy System Incentive Program is a production-based financial incentive for customers with solar, wind, and bio-digester generating systems.
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.
The objective of incentive compensation is to incentivise individual and/or collective performance, and to recognise and reward this performance.
Bonuses ? like all incentives ? are separate from salary and commissions. They are awarded at the employer's will and decided upon once reps have hit their targets. The primary difference between bonuses vs. incentives is that incentives are decided upon ahead of time, while bonuses are granted after goals are met.