payment in kind (PIK)

1. Payment in goods or services that are similar to goods or services that have been provided. Payment in kind contrasts with payment in money.
2. A relatively unusual type of security that allows the issuer to pay the investor with additional shares (in the case of PIK preferred) or with bonds (in the case of PIK bonds) rather than with cash. PIK securities nearly always originate as a result of a leveraged buyout.