New NCEO Issue Brief on State of Broad-Based Equity Plans in the U.S.

A new NCEO issue brief, The State of Broad-Based Employee Equity Plans, looks at research on the prevalence of these plans, who participates in them, and how they have changed in the last decade. It also reviews research on the impact of equity plans on corporate performance.

The issue brief finds that the consensus of researchers indicates that about nine million U.S. employees receive stock options, restricted stock, or other individual equity awards. Most technology companies still offer awards to most or all employees, and virtually all pre-IPO firms do. About 11% of public companies make most employees eligible for awards, although eligibility does not always translate into actually receiving an award. About 11 to 12 million employees participate in employee stock purchase plans. The number of employees involved in both individual equity and stock purchase plans has dropped about 30% from its 2001 peak, but is about the same as the late 1990s.

The issue brief also summarizes research on the impact of broad-based versus narrowly issued plans. Almost all the studies on broad-based plans find that they have a positive impact in performance. Plans focused on executives have a mixed record in the research.

The study is available for $15 to NCEO members and $25 to non-members. See here for excerpts and ordering information.