Key Employee

An employee with a major ownership and/or decision-making role in the business. Key employees are usually highly compensated. They may also receive special benefits as an incentive both to join the company and to stay with the company.

"Key employee" is also a term used by the Internal Revenue Service in regard to company-sponsored defined contribution retirement plans to refer to an employee who owns more than 5% of the business, owns more than 1% of the business and has annual compensation greater than a certain amount or is an officer with compensation greater than a certain amount. There are other IRS and government rules that have different definitions of "key employee" for different purposes.

Investment dictionary. . 2012.

Look at other dictionaries:

  • key employee — For purposes of the Family and Medical Leave Act (FMLA), a salaried employee who is in the highest paid 10% of the company s employees working within 75 miles of the employee s worksite. An employer does not have to reinstate a key employee after …   Law dictionary

  • key employee — Any Reservist identified by his or her employer, private or public, as filling a key position …   Military dictionary

  • Key Employee Retention Plan — These plans were traditionally put in place in bankruptcy cases as incentives to upper management to continue working for the debtor throughout the bankruptcy. KERPs have been substantially curtailed under the 2005 amendments to the bankruptcy… …   Glossary of Bankruptcy

  • key man insurance — USA Life insurance, disability insurance or both purchased by a company on a key employee to compensate the company for financial losses relating to the absence of that employee. Practical Law Dictionary. Glossary of UK, US and international… …   Law dictionary

  • key — adj: of vital importance (as in a business organization) esp. so as to be specially insured to the benefit of an employer key man key employee insurance Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 …   Law dictionary

  • key-person insurance — Gen Mgt an insurance policy taken out to cover the costs of replacing a key employee. Key person insurance comes into play in the case of an employee’s mediumto long term sickness or death. Also known as key man insurance …   The ultimate business dictionary

  • key-person assurance — An assurance policy on the life of a key employee of a company, especially the life of a senior executive in a small company, whose death would be a serious loss to the company. In the event of the key person dying, the benefit is paid to the… …   Big dictionary of business and management

  • Employee engagement — is a concept that is generally viewed as managing discretionary effort, that is, when employees have choices, they will act in a way that furthers their organization s interests. An engaged employee is a person who is fully involved in, and… …   Wikipedia

  • Employee value proposition — is a term used to denote the balance of the rewards and benefits that are received by an employee in return for their performance at the workplace. [cite web|url=|title=The Employee… …   Wikipedia

  • key performance indicator — UK US noun [C] (ABBREVIATION KPI, also key indicator) ► ECONOMICS, HR one of the most important indicators (= something that shows what a situation is like or how it is changing) that show how well an economy, company, project, etc. is doing, or… …   Financial and business terms

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