The net money you actually bring home, usually in after-tax and other obligations.
Like...let's say you're a partner in a venture capital company and you make a salary of $1 million a year. Might seem like a ton of money. It may become that if the fund does well...but here's the math in The People's Republic of California: you are taxed about 50 percent off the top. So you have $500k to play with...but you have fund investment obligations, meaning that you have $100-150k a year, usually, that you then have to invest in your fund. You also have 401(k) contributions and other things that come out of your paycheck before taxes. After "everything," you might end up with $300k or so as your take home pay.
Might seem like a lot, but when a dump of a 40-year-old asbestos-filled house costs $5 million, private school for each kid is $50k a year, and alimony for the first spouse is running you $100k a year, the money evaporates...fast. Better hope you find the next GOOG.
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Finance: What is Deferred Compensation?8 Views
Finance allah shmoop what is deferred compensation Well you don't
get it today You get it next year at some
point you know differed If you've gotten paid today it
would have binford but then it was deford's so well
yeah it's money you don't get right now Yeah so
whywould compensation be deferred Well lotsa reasons think about a
bonus that a sales person might earn through out the
year like they get two grand in bonus money payable
next year for each month that they sell over four
pounds of yellowcake uranium powder Bob here did it in
january messed around in february and march and was a
good boy in april may and june and then on
lee hit one more sales goal ahead of christmas doing
four pounds in uzbekistanian november So bob had five months
hitting his sales bonus target and we'll have owed to
him ten grand in bonus money e compensation that was
deferred and noting that all bonuses are paid in january
of the following year like it's deferred to the following
year So from the company's perspective they show deferred compensation
as a line item or a thing on their balance
Sheet is a liability And then they converted to being
an expense when they pay everything out the first month
of the next year so come january Bob will be
very happy with his healthy bonus That is you know 00:01:29.357 --> [endTime] assuming he's still around to enjoy it there No
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