Hurdle rate (also used in German; hurdle = a framework to be leaped over in racing)

The distribution of profits first to investors before management or other contractually entitled parties – often also the workforce through a bonus – share in the profits of a company or fund; also translated into German as Auszahlungshürde (hurdle rate). – According to IAS, the return that must be earned to cover the cost of capital; also translated into German as kalkulatorische Grundverzinsung. – A pre-determined benchmark rate of return from an engagement, also translated as minimum return and basic return. – See stock options, carried interest, hedge funds, profitability, executive compensation.

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