Recompense

DEFINITION of 'Recompense'

The act of awarding a target person, group or entity some form of monetary benefit as a result of the target performing some action or as a result of some action happening to the target. This is one of the main tenets of capitalism, as people perform a task as a result of being paid some sort of relevant incentive.

For example, companies may pay its workers with a special cash bonus as a result of the workers' efforts in contributing to the company's profits. However, a company may have to pay a compensation as a result of an injury that happened to the worker as a result of the company's negligence.

BREAKING DOWN 'Recompense'

Recompense payments award a targeted person, group or entity with some form of monetary benefit as a result of previous actions performed or occurrences of legal loss. Entities often use recompense payments to reward employees for high performance or goals achieved. Court actions also often include required recompense payments for losses from expenses incurred over a specified action or series of tasks.

Recompense payments are one of the main tenets of capitalism, they provide relevant incentive for actions and tasks performed through assurance of due payment. In a capitalist society, these payments can be relied upon because of the standards set by legal frameworks for citizens and businesses.

Recompense Payment Examples

As an example, companies may pay its workers with a special cash bonus as a result of the workers' efforts in contributing to the company's profits. These special cash bonus payments are often contingent upon past performance levels achieved or corporate goals attained during a previously specified period of time.

Recompense payments are also often referred to in worker compensation cases. In worker compensation cases, companies may be required to pay recompense payments as compensation for past injury or harm incurred by an employee as a result of work on the job or the company's negligence.

Companies under business organization often have reserve funds allotted for various types of recompense payments. These funds are typically paid into on a regular basis to allow for appropriate and timely payout of recompense payments or rewards. Payments of recompense are denoted as a liability on corporate balance sheets.

In the case of a legal matter, an individual or entity may be required to make recompense payments as compensation for past damages or losses incurred through the course of a series of events or tasks under judgement in a legal proceeding. Expenses eligible for recompense may occur throughout the duration of a case in legal court. In legal court cases, expenses for recompense are required to be paid in full to the damaged party upon a legal order by the court. Terms of legal recompense payments are typically outlined and awarded based on the court’s legal view of just and adequate compensation for loss or damages.

RELATED TERMS
  1. Workers' Compensation

    Workers' compensation is a publicly-sponsored system that pays ...
  2. Qualified Pre-Retirement Survivor ...

    A death benefit that is paid to the surviving spouse of a deceased ...
  3. Performance Bonus

    A form of additional compensation paid to an employee or department ...
  4. Workers' Compensation Coverage ...

    Insurance that protects employees under state laws, and provides ...
  5. Employer's Liability Insurance

    A product for employers that protects them from major financial ...
  6. Bonus

    1. Additional compensation given to an employee above his/her ...
Related Articles
  1. Personal Finance

    When is a Down Payment Used?

    A down payment is an initial cash payment on an expensive good.
  2. Entrepreneurship & Small Business

    Raises or Bonuses Better for Small Business Staff?

    Weigh the pros and cons of each and strike the right balance to retain a top-tier staff and a healthy bottom line for your business.
  3. Professionals

    3 Reasons Businesses Give Bonuses to Poor Performers

    Learn more how bonuses paid to poorly-performing employees affect a company and why many businesses are still paying out financial rewards to such workers.
  4. Markets

    Is the Payment Processing Industry Evolving? (PYPL, TGT)

    Learn about the many changes in commerce and payment systems that are happening in the rapidly evolving payment processing industry.
  5. Markets

    The Foundation Of Structured Settlements

    This annuitized payment setup should be arranged through impartial attorneys and tax agents.
  6. Trading

    A Guide To CEO Compensation

    Make sure you assess whether a CEO has a stake in doing a good job for you, the shareholder.
  7. Retirement

    What is a Lump-Sum Payment?

    A lump-sum payment is a one-time payment for the total or partial value of an asset.
  8. Retirement

    Equity Vs. Salary: What You Need To Know (FB, GOOG)

    Equity payments are common at startup companies. Equity offers potential for a big payout but is also much riskier than a salary payment.
  9. Retirement

    How Non-Qualified Deferred Compensation Plans Work

    These tax-advantaged retirement savings plans have their pros and cons, and employers and employees must follow strict guidelines.
  10. Investing

    Understanding the Mortgage Payment Structure

    We explain the calculation and payment process as well as the amortization schedule of home loans.
RELATED FAQS
  1. Will a 10-99 form make my taxes higher?

    My employer is not withholding taxes each pay day. Will this increase my taxes because they will give ... Read Answer >>
  2. In what context is a corporation considered to be an individual entity?

    Read about when a corporation is considered an individual entity, when it is not and why corporations are not considered ... Read Answer >>
  3. What are some examples of how corporations manage short-term investments?

    Learn how a business owner can protect against significant liability by forming a corporate entity structure, and understand ... Read Answer >>
  4. How does the Bureau of Labor Statistics define contingent workers?

    Discover how contingent workers are a significant part of the labor force and are defined as persons who do not expect their ... Read Answer >>
  5. Is a deficit in the balance of payments a bad thing?

    Discover how it might be possible to run a balance of payments deficit, what that means in terms of international trade and ... Read Answer >>
  6. What is the difference between legal liability and public liability?

    Discover the differences between a general legal liability, a specific public liability and a professional indemnity in the ... Read Answer >>
Hot Definitions
  1. Put Option

    An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security ...
  2. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  3. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  4. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  5. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  6. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
Trading Center