Director Stock Ownership Guidelines in Place at 84 Percent of Fortune 250

Aug. 4, 2010 - PRLog -- Redwood City, Calif. - Equilar, the market leader in director compensation data and research, has published an article on director stock ownership guidelines for the Fortune 250. In keeping with the overall ethic of pay for performance with executives, the report indicates that most companies also have some kind of stock ownership policy for their directors: 84.0 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, 188 of whom disclosed director ownership policies. A few of Equilar’s findings:

•   79.3 percent of F250 companies disclosed ownership guidelines, alone or in combination with holding requirements, in 2009. That’s a small rise from 2008, when 77.5 percent of companies disclosed them.

•   19.8 percent of F250 companies disclosed holding requirements, alone or in combination with ownership guidelines, in 2009. It’s a small bump from 2008, when 19.2 percent of companies disclosed them.  Holding requirements are far less common for directors than they are for executives.

•   Multiples of the retainer is still the most commonly used ownership guideline plan design, but it’s declining. 54.8 percent of all ownership guidelines use it, down from 57 percent in 2008. The second-most-common plan is setting a fixed number of shares (23.9 percent of 2009 plans, down from 27.4 percent in 2008).

•   The plan design of setting a fixed value of shares is on the rise. It made up 11 percent of plans in 2007, 11.3 percent of plans in 2008, and 14.4 percent of plans in 2009. “Other” plans are also up, from 4.3 percent of 2008 plans to 7.4 percent of 2009 plans.  

•   Stock options usually aren’t counted toward ownership guidelines: only 7.4 percent of companies allow them to be added to the total, while 5.3 percent explicitly exclude them from being counted. Another 15.4 percent count some portion of options, typically only vested and exercised options. Deferred shares and stock equivalents, on the other hand, are accepted toward the total by about 46.8 percent of companies.

•   The median value of target stock ownership for directors was approximately $262,850 in 2009. This is a slight increase from 2008, when the median was $250,000. By comparison, median target value for CEOs did not change significantly between 2008 and 2009.

•   Increased transparency in disclosure of facets like compliance status, non-compliance penalties, and anti-hedging policies. The full report has specific CD&A examples for these areas.

The complete report is provided to all Equilar Knowledge Network subscribers. Non-subscribers can request a copy of the report by visiting
http://www.equilar.com/knowledge-network/research-reports...

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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 director 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 directors, 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 City, CA) was recognized recently as one of the fastest-growing private companies in America by Deloitte, Inc., and the Silicon Valley Business Journal.