The Advisors' Blog

– David Chun, Equilar

We’ve been collecting data for our annual ownership guidelines report and we found a number of interesting trends. One such trend was the significant jump in the number of hardship provisions disclosed. Recently, we released a short article in our Executive Compensation Trends newsletter titled “Decline in Equity Values have more Companies Disclosing Hardship Provisions” and found:

– 82.1% of Fortune 250 companies disclosed that they have ownership guidelines.

– 32 companies stated that they had executives that did not achieve the required ownership level, which is the same amount of companies as the previous year.

– Since ownership guidelines are typically tied to a requirement to hold a certain value in shares, many executives had equity values that were pinched in the declining market. Rather than having to comply immediately with the ownership guidelines, many companies triggered hardship provisions. In fact, there was a significant jump of nearly 75% year-over-year in companies disclosing hardship provisions. These provisions typically allow for more time or amended ownership requirements in order to meet those guidelines.