Home » Publications »
The New ESOP Executive Compensation and Private Company Equity Compensation Surveys
An NCEO Issue Brief
by Matt Keene, Camille Kerr, and Corey Rosen
$15.00 for NCEO members; $25.00 for nonmembers
A 20% quantity discount will be applied if you are a member (or join now) and order 10 or more of this publication. If you need to order more than the maximum number in the drop-down list below, change the quantity once you have added it to your shopping cart.
This ebook may not be resold or given away to others. If you would like to share this book with another person, please purchase an additional copy for each recipient. For example, if you want a copy for yourself and two colleagues, choose the quantity 3, add it to your cart, and check out. You will then download one copy that you can also provide to your two colleagues. Thank you for respecting our rights as an independent publisher.
NCEO members who supply their members area username and password during checkout can download digital publications like this one immediately after submitting an online order. Others will immediately receive a download link that will become live within one business day.
About Our Issue Briefs
Our issue briefs cover a variety of special topics and are available in PDF and hard-copy format. They are available for individual purchase, but you also can buy an issue brief subscription and receive every new one as it is released. Read here for details or to order.
Format: PDF, 18 pages
Publication date: March 2012
Status: Available for electronic delivery
Usage Rights for NCEO Digital Publications
When you download an NCEO digital publication that you purchase or subscribe to (or that someone purchases or sponsors for you), you may copy it to any computer or other electronic device you personally use, and you may print it for your own use. However, you may not share it with others unless you purchase a license to do so or buy a copy for each person.
The 2011 NCEO Survey of ESOP Company Executive Compensation
Executive Compensation in Today's Environment
Practicing Good Governance
Developing a Compensation Philosophy
Mix of Pay
How to Obtain the Full Survey Results
The NCEO Private Company Equity Compensation Survey
Survey Design Issues
Company Survey Results
Models for Sharing Equity
How to Obtain the Full Survey Results
From "The 2011 NCEO Survey of ESOP Company Executive Compensation"Having covered how the LTIP units are granted and how they are vested, let us turn to what is being granted. The 2011 Survey shows that ESOP companies continue to favor SARs and phantom stock, with SARs being the most popular. Considering all responding companies, 9% of the CEOs received SARs and 6% received phantom stock units. This is a small but noticeable increase relative to the 2009 Survey, where 4% of CEOs had SARs and 5% had phantom stock. Table 4 provides more extended data on stock incentive grants at ESOP companies.
What is driving this uptick in SARs? It is hard to say with any certainty, but there are many possibilities. For one, the companies participating in the 2011 Survey were larger as a whole, by revenue, than the 2009 respondents. Larger companies tend to grant LTIPs, and particularly SARs, with more frequency. See table 5, derived from the 2011 Survey, which shows the percentage of companies in each revenue class that grant SARs to executives.
A large percentage of responding companies for both surveys are S corporations, and the Section 409(p) anti-abuse rules can significantly reduce the availability of LTIP awards for smaller companies. Section 409(p) is more driven by the number of ESOP participants than it is by company revenue, but revenue and employees tend to move in the same direction, so companies with less revenue likely face stronger Section 409(p) headwinds.
The prevalence of phantom stock was pretty consistent between the two surveys, but SAR grants increased more significantly. In the wake of the recent recession, there is more focus on aligning executives' efforts with company and shareholder outcomes, and in my experience, external ESOP trustees view appreciation-based awards as generally providing better alignment than full-value awards such as phantom stock. It is hard to say for sure, but the uptick in SAR prevalence in the 2011 Survey is likely a combination of this increased focus on governance, coupled with more representation in the 2011 Survey from the larger companies that are more likely to have external independent trustees.