June 23, 2015
Decline in Share Utilization at Fortune 500
– Broc Romanek, CompensationStandards.com
This study by Towers Watson shows a trend of steadily declining levels of run rate, overhang and long-term-incentive (LTI) fair value as a percentage of market capitalization in equity compensation programs at Fortune 500 companies. While the decline in share-use metrics appeared to have plateaued in fiscal 2012, the latest study indicates that the pause was only temporary. Companies continued to reduce share usage over the most recently completed reporting year, driven by the growing emphasis on granting full-value share awards (e.g., time- and performance-based shares/units) over appreciation awards (e.g., stock options) across the universe of companies in their sample.
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