Definitions for "Annual bonus"
This is a bonus that is declared by the company. The company declares an annual percentage rate and a portion of this rate is added to the unit price of the fund on a daily basis until the company changes the rate. The rate will generally change on a yearly basis but it may change more frequently. The bonus represents a distribution of profits.
Companies that offer annual bonuses can do so in a variety of ways. Some offer profit sharing, which rewards every employee for a job well done after a successful quarter or year. Typically, an employer will set aside a predetermined percentage of its payroll budget (between 2.5 and 15 percent) and divide that amount among employees in the form of bonuses. This type of bonus does not necessarily take into account an individual's performance, since every employee receives either the same bonus or a bonus equivalent to a percentage of base salary. It's not uncommon, however, for a company to award annual bonuses to top-performing employees only and base the amount of the bonus on an individual's achievements or performance, for example.
Yearly payment of shares or cash applied to an employee’s wage for the fiscal year.