Companies looking for data stock plan share usage will be interested in Frederic W. Cook’s 2020 Aggregate Share-Based Compensation report.
The report looks at share usage trends at 300 companies over a three-year period (2017-2019) and includes the following:
Company-wide annual grant rates, measured based on annual share usage and fair value transfer (“FVT”).
Overhang, measured based on potential share dilution as well as the fair value of outstanding grants.
Frequency and prevalence of long-term incentive plan share requests.
Allocation of long-term incentive pools to the CEO and other proxy officers (“Top 5”).
Highlights of findings stated in the report include:
Annual fair value transfer rates as a percentage of market capitalization were generally stable compared to the prior study (published in 2017), with the median 3-year average annual rate decreasing from 0.95% in the prior study to 0.92% in the current study.
Potential dilution from outstanding equity awards has trended downward over the last three years, falling from 3.2% at the median in 2017 to 2.7% in 2019. This continues a trend observed over the last twelve years.
Allocation of the long-term incentive pool to the CEO and to the Top 5 proxy reported officers is closely linked to company size as small-cap companies grant a significantly higher percentage of the overall pool to their top officers compared to large-cap companies, who generally have more long-term incentive participants.
Over the three-year period, 58% of sampled companies sought shareholder approval of a new employee stock plan share authorization, with median size of request being approximately 4% of common shares outstanding.
Additional insights and analysis are available in the full report.
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