New Data on Broad-Based Ownership Plans in Global Companies

The "2005 Global Equity Incentives Survey Report" from PricewaterhouseCoopers shows that 24.4% of the 82 respondents with U.S. employees make all staff eligible for options, 4.8% make all staff eligible for restricted stock units, and 5.6% for restricted stock. The survey included 131 global companies, 126 of whom had U.S. employees. In the high-tech sector, 43.3% of the responding companies report that all staff are eligible for options, while none make options available only to senior management. The study also reports, however, that 16% of the companies say they will reduce or eliminate option grants to all staff, compared to 18% for middle to upper management and 10% for senior management. In some cases, these grants will be replaced with other forms of equity, although the survey does not make it possible to know how often this replacement will occur specifically in broad-based plans. Fifty-six percent of the companies, however, say they will maintain their plans as they are, and 22.8% have not yet decided.

In responding to changing accounting rules, 12.9% of the respondents plan to eliminate broad-based stock purchase plans, such as ESPPs, while 10.8% say they will change the plan, 24.7% will continue the plans as they are, and 51.6% don't know. Interestingly, these possible reductions come in the face of growing participation and satisfaction with the plans. According to the companies, 85% of their employees are happy with their stock purchase plans. More tellingly, employee participation reached an all-time high, with 32% of the companies reporting that over 50% and 75% of employees were involved, an impressive results for cross-national plans. The report urges companies to retain their stock purchase plans, noting that the accounting cost is minimal and the employee benefit high.

The report provides considerable detail on other aspects of global plans, including compliance, administration, and accounting procedures, often broken down by country. A copy of the report is available at PWC's site.