Over 80 Percent of Fortune 250 Companies Use Executive Stock Ownership Guidelines

July 28, 2010 - PRLog -- Redwood Shores, Calif. - Equilar, the market leader in executive compensation data and research, has published an article on executive stock ownership guidelines for the Fortune 250. In an era of pay for performance, the report indicates that most companies have some kind of stock ownership policy: 84.4 percent of F250 companies in 2009, compared to 82.1 percent in 2008.

The report is based on FY 2009 proxy filings of 237 members of the F250, 200 of whom disclosed ownership policies. A few of Equilar’s findings:

•   80.6 percent of F250 companies disclosed ownership guidelines, alone or in combination with holding requirements, in 2009. That’s a small rise from 2008, when 78.3 percent of companies disclosed them.

•   40.1 percent of F250 companies disclosed holding requirements, alone or in combination with ownership guidelines, in 2009. It’s a big jump from 2008, when 35.5 percent of companies disclosed them. Most of this rise is attributable to plans that use ownership guidelines and holding requirements in tandem.

•   Ownership as a multiple of base salary is still the most commonly used plan design, with 82.2 percent of all ownership guidelines designed around it. Other potential plans are setting a fixed number of shares (12.6 percent of 2009 plans), or letting the executive go by a multiple of salary or a fixed number of shares, whichever is less (3.1 percent of 2009 plans). This distribution of plans has remained fairly consistent since FY 2006.

•   Stock options usually aren’t counted toward ownership guidelines: only 10.5 percent of companies allow them to be added to the total, while 33.0 percent explicitly exclude them from being counted. Share equivalents and plan shares, on the other hand, are accepted toward the total by about 40 percent of companies.

•   The median value of target stock ownership for CEOs was approximately $6 million in 2009, roughly the same as in 2008.

•   Increased transparency in disclosure of guideline facets like compliance, hardship provisions, anti-hedging policies, and retirement clauses has emerged. The full report has specific CD&A examples for these areas.

The complete report is provided to all Equilar Knowledge Center subscribers. Non-subscribers can request a copy of the report by visiting http://www.equilar.com/Executive_Compensation_Reports.php.

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About Equilar, Inc. (http://www.equilar.com)
Equilar's award-winning product suite is the gold standard for benchmarking and tracking executive compensation, board compensation, equity grants and award policies and compensation practices. Equilar products and custom research services enable corporations, human capital consulting firms, law firms, investors, individual executives, and the media to accurately compare pay packages across thousands of public companies using SEC and exclusive survey data. Equilar research is cited frequently by Bloomberg, BusinessWeek, Reuters, The New York Times, The Wall Street Journal and other leading media outlets. Equilar (Redwood Shores, CA) was recognized recently as one of the fastest-growing private companies in America by Deloitte, Inc., and the Silicon Valley Business Journal.