Jurisdiction(s):
United Kingdom

Key definition

Short definition

What does Short mean? In legal and financial practice, being “short” describes a position where a person has net negative exposure to an asset—i.e. exposure below neutral—so that they benefit if the asset’s price falls. A short position commonly arises by selling borrowed securities (a short sale) or through derivatives that create negative exposure, such as writing options, entering into futures or forwards as the seller, or using contracts for difference or swaps. “Short” is a descriptive market term used across transactional documents, litigation and regulatory contexts. While the word itself is not generally defined in statute, short selling and net short positions are regulated....

US sign-on bonuses, equity awards and short- and long-term executive cash incentives: drafting and legal pitfalls (employment, tax under IRC 162(m), 404, 409A, and US state law)

Published by a LexisNexis Share Incentives expert

Practice notes

Organisations routinely use equity awards and cash bonuses to motivate key personnel. The opening section of this Practice Note examines principal issues for awards designed to persuade a crucial hire to take up a role with the employer (i.e., a sign-on bonus or sign-on equity awards). The following section considers Short- and Long-term cash incentives aimed at encouraging executives to stay and/or concentrate on defined performance targets. This Practice Note is organised into the following parts:

Sign-on bonuses and sign-on equity awards
Short-Term cash incentives
Long-term cash incentives

For guidance on equity incentives that help retain key employees, refer to Practice Notes: Understanding types and taxation of US equity compensation, Designing a US public company equity compensation plan, and Drafting a US private company equity compensation plan.

Sign-on bonuses and sign-on equity awards

Sign-on bonuses

Sign-on bonuses most often arise where an employee would lose equity, deferred remuneration, or other sums by leaving their current employer. This reflects departure that would otherwise forfeit outstanding awards or deferred sums on resignation from the employer. In other situations, they simply offer an additional prompt for an employee to move jobs. Employers usually settle these bonuses in full on appointment. Beyond deciding the...

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Web page updated on 22/05/2026

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