Profit-Sharing Plan
A plan that gives employees a share in the profits of the company. Each employee receives into an account, a percentage of those profits based on their earnings. Also known as "deferred profit-sharing plan" or "DPSP".
Investopedia Commentary
This is a great way to give employees a sense of ownership in the company. The company decides what portion of the profit will be shared. And there are typically restrictions as to when and how you can withdraw these funds without penalties.
Related Links
Analyzing Pension Risk
The 401(k) and Qualified Plans Tutorial
Lifting the Lid on CEO Compensation
See also: Qualified Plan, Stock Options
Also spelled: Profit-Sharing Plan, deferred profit sharing plan
profit-sharing plan