ratchet

/ˈrætʃɪt/ noun [C]

Definition

› FINANCE, STOCK MARKET an arrangement by which managers are given increasing numbers of shares in a company in relation to increases in its profits or success: The sale has been rewarding for the chief executive, whose original 20% stake grew to 30% under a ratchet arrangement.

› PRODUCTION a part of a machine that allows controlled movement in one direction only

› a system that controls activity: Tightening the interest-rate ratchet to control inflation would risk tipping the economy into a nasty downturn.

(Definition of ratchet noun from the Cambridge Business English Dictionary © Cambridge University Press)