November 3, 2008
The Latest Stock Ownership Policy Trends
– Broc Romanek, CompensationStandards.com
Recently, Equilar released its latest trend reports regarding stock ownership policies. Below is a summary of the full reports (which can be purchased from Equilar here):
1. Executive Stock Ownership Policies
– The prevalence of Fortune 250 companies with publicly disclosed executive stock ownership policies, including ownership guidelines and/or holding requirements, increased from 80.9% in 2006 to 82.6% in 2007.
– Ownership guidelines remain the most prevalent form of ownership policy, appearing at 78.0% of Fortune 250 companies in 2007. In 2006, 75.5% of companies disclosed guidelines.
– For Fortune 250 companies with ownership guidelines, most choose to define ownership targets as a multiple of base salary. In 2007, 79.8% set their targets in this fashion.
2. Director Stock Ownership Policies
– The prevalence of Fortune 250 companies with publicly disclosed non-employee director stock ownership policies, including ownership guidelines and/or holding requirements, increased from 77.6% in 2006 to 78.9% in 2007.
– Often, ownership guidelines and holding requirements can be used in tandem to promote equity ownership. Among the Fortune 250, the prevalence of companies with both types of policies for non-employee directors increased from 12.8% in 2006 to 16.2% in 2007.