Incentive Fee

Well, most of the time, you (as money manager) get a fee. Like...1 or 2 percent a year for managing the money. But that's not enough if you live in the land of hedge or private equity or venture capital funds.

In addition to your set annual fee, you get an incentive for doing well. Or rather, more of an incentive for doing well. Think: "Twenty percent of profits, calculated each quarter." Or something like that. See: Carry. You have then all the incentive to...do well.