This article is about a type of business incentive plan for employees. For a method of finance used in Islamic banking, see Profit and loss sharing. For the retirement plan, see Profit-sharing pension plan.
Profit sharing refers to various incentive plans introduced by businesses which provide direct or indirect payments to employees, often depending on the company's profitability, employees' regular salaries, and bonuses.[1][2][3] In publicly traded companies, these plans typically amount to allocation of shares to employees.
The profit sharing plans are based on predetermined economic sharing rules that define the split of gains between the company as a principal and the employee as an agent.[4] For example, suppose the profits are , which might be a random variable.[4] Before knowing the profits, the principal and agent might agree on a sharing rule .[4] Here, the agent will receive and the principal will receive the residual gain .[4]
Profit-sharing tends to lead to less conflict and more cooperation between labor and their employers.[5][6]
^Monroe, Paul (1896). "Profit Sharing in the United States". American Journal of Sociology. 1 (6): 685–709. doi:10.1086/210565. ISSN 0002-9602. JSTOR 2761478.
^Monroe, Paul (1899). "Profit-Sharing and Cooperation. I". American Journal of Sociology. 4 (5): 593–602. doi:10.1086/210833. ISSN 0002-9602. JSTOR 2761583.
^Monroe, Paul (1899). "Profit-Sharing and Cooperation. II". American Journal of Sociology. 4 (6): 788–806. doi:10.1086/210857. ISSN 0002-9602. JSTOR 2761863.
^ abcdMoffatt, Mike. (2008) About.com Sharing Rule Archived 2016-03-03 at the Wayback Machine Economics Glossary; Terms Beginning with S. Accessed June 19, 2008.
^Dean, Adam (2015). "The Gilded Wage: Profit-Sharing Institutions and the Political Economy of Trade". International Studies Quarterly. 59 (2): 316–329. doi:10.1111/isqu.12200. ISSN 0020-8833.
^Dean, Adam (2016). From Conflict to Coalition. Cambridge University Press. ISBN 978-1-107-16880-0.
to allocation of shares to employees. The profitsharing plans are based on predetermined economic sharing rules that define the split of gains between...
Profit and Loss Sharing (also called PLS or participatory banking) refers to Sharia-compliant forms of equity financing such as mudarabah and musharakah...
alternative". A distinction can be made between free sharing, such as genuine sharing, and for-profitsharing, often associated with companies such as Uber,...
all of their employees for the success of the games they create via a profitsharing scheme. In just over one year, the scheme paid out over £1 million to...
profits to shareholders, the company shares its profits with members, and paid out $54.1 million through its profitsharing program in 2018. Profit sharing...
businesses but none the less all profit maximization is a matter of each business stage and greater returns for profitsharing thus higher wages and motivation...
corporation must pay in taxes and royalties or other profit-sharing agreements, as these are based on net profit. Hollywood accounting gets its name from its...
builders in China. Country Garden implemented a profit-sharing model, whereby 20 percent of a project's net profit is awarded to general project managers and...
be paid to governments under profit-sharing agreements. The use of the posted price as a pricing basis for the 50-50 share agreements varied from country...
takaful can be implemented: Mudharabah model (profit-sharing): the managers (shareholders) are sharingprofit and losses with the policyholders; used initially...
initial grant date, giving a considerable tax advantage to the employee. Profit-sharing plans are usually vested in ten years, although in some cases a plan...
the only artist to ever sign with the label. RBMG also has a special profit-sharing business deal with Def Jam Recordings, owned by Universal Music Group...
related to the capital or profitshare, the part of income going to capital, which is also known as the K–Y ratio. The labor share is a key indicator for...
country. ProfitSharing for industrial workers in private sector enterprises, giving the factory workers and employees 20% share of the net profits of the...
the car sharing facilitator is generally distinct from the car owner. Car sharing is part of a larger trend of shared mobility. Car sharing enables an...
their share of the company's profits were added. In 1947, fully 19.7%, on average, of every employees pay check was from profitsharing income. Profits were...
Gross sales of Rs. 340 billion Profit of Rs. 25 billion Power generation of 2,500 Megawatts SCCL offering profitshare to miners, which began in 1999–2000...
of Internet sharing, typically through video sharing websites such as YouTube as well as social media and email. For a video to be shareable or spreadable...
start with, a very simple illustration is provided to describe the profit-sharing concept, which will be expanded upon subsequently. (See Guidelines for...
and thus boost the local economy. He viewed the increased wages as profit-sharing linked with rewarding those who were most productive and of good character...
economics. Some of the modes of Islamic finance include mudarabah (profit-sharing and loss-bearing), wadiah (safekeeping), musharaka (joint venture),...
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