The Advisors' Blog

– Logan Carr and Cimi Silverberg, Frederic W. Cook & Co.

Recently, we completed this survey of executive stock ownership policies. Stock ownership policies for executives have become virtually universal among large companies. Although the most prevalent approach continues to be the traditional multiple-of-salary guideline, use of retention ratios in combination with traditional guidelines continues to gain prevalence. Holding periods, whether in combination with traditional guidelines or stand-alone, are less prevalent, but institutional investor advisory groups, such as ISS, are encouraging companies to adopt them. Hold-beyond-retirement policies have not yet been widely embraced, but this type of ownership policy could emerge as a corporate governance “best practice.”

Read our survey for more statistics and analysis of the trends that we found, such as this breakdown regarding the prevalence of types of stock ownership policies:

• Multiple of Salary only- 43%
• Combination with Retention Ratio*- 21%
• Combination with Holding Period*- 11%
• Fixed Shares only- 7%
• Retention Ratio only- 7%
• Lesser of Multiple Of Salary or Fixed Shares- 6%
• Combination with Retention Ratio and Holding Period*- 2%
• Holding Period only- 1%
• Multiple of Total Annual Compensation- 1%