earnout

Definition

An arrangement in which sellers of a business receive additional future payment, usually based on future earnings.

Use earnout in a sentence

You should always try to make sure that you do everything that you agreed to when involved in an earnout.

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The agreed upon selling price was less than planned but there is an additional earnout at the end of each year.

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The earnout was the last item to be negotiated as it was obvious the business would continue to generate profits.

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earnings-related pension earn-outs