BONUS, a term used in business or finance to describe an exceptional, occasional, or gratuitous addition to customary pay ments. It is a jocular and effective application of the Lat. bonus, for bonum, "a good thing." When a joint-stock company makes an exceptional profit, and enlarges its dividend temporarily, it pays a "bonus" to its shareholders to distinguish between the extra and the customary payment. When new shares are created out of reserves, and distributed to shareholders, they are termed bonus shares. Similarly, life insurance companies often distribute, out of accumulated surplus (see LIFE INSURANCE), bonus addi tions to the face value of policies.
After the World War a strong effort was made in the United States to secure a national bonus for veterans in compensation for financial losses supposedly incurred by them through their service. A measure providing such compensation, though defer ring its payment until 1945, was passed in 1924 over president's veto. On the subsequent movement for immediate payment see UNITED STATES OF AMERICA, History; AMERICAN LEGION.