April 1, 2021
S&P 500 Share Utilization Trends
– Lynn Jokela
Here are some of the key findings from this Willis Towers Watson study of share utilization by S&P 500 companies:
– Companies have continually increased the use of full-value awards, while use of options has steadily decreased – sectors with highest use of certain forms of equity were: RSUs (IT, 79% of long-term incentive mix), performance-based stock (utilities, 54% of LTI mix), options (consumer staples and industrials 23% of LTI mix)
– Median run rates have declined by 19% since 2016, with this trend continuing based on an early look at 2020 grants
– Overhang changed slightly from 7.4% in 2017 to 6.9% in 2019, and again the trend continues based on early review of 2020 filings
– LTI fair value, in terms of dollars, has continued an upward trend – at median levels, LTI fair values increased by 27% while LTI fair value as a percentage of market cap had a 5% decrease from 2015