Assessor Series FAQ #14

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Frequently Asked Questions

QUESTION:  What do the "incentive" amounts represent?

The average incentive amount shown is the total of all cash incentives (annual bonuses, commissions, or other cash incentives) divided by the total Fiscal Year Budget (FYB) in the job (including those who did not receive bonuses or cash incentives).

For example, there are 1,000 employees in a job classification.  Eight hundred employees are bonus eligible; among the 800 employees who are bonus eligible, a total of $200,000 dollars in annual bonuses are paid to 700 employees, while 100 of the bonus eligible employees received no bonus pay due to their company's performance.

Out of the 1,000 employees in the classification, two hundred employees work for companies without a bonus plan, so they received no bonuses.

The average annual incentive (or bonus) shown by ERI is the $2,000 (or $200,000 divided by 1,000 total employees).

Incentive is defined as, "Additional pay (above and beyond the base salary or wage) awarded to an employee, such as stock options or a contingent bonus plan, that is 'forward looking'."

Bonus is defined as, "Plans that award cash or other items of value, such as stock (or stock options), based on accomplishments achieved. While incentive plans are 'forward' looking' bonus plans are 'backward looking'." 

For more definitions of compensation terms, please see the Online Business Glossary provided by the ERI Distance Learning Center.