New NCEO Survey of Equity Compensation in Private Companies

The NCEO has completed a new survey of equity compensation practices in private companies. We received 201 completed surveys from companies and 32 from service providers. Respondents represented a broad range of entrepreneurial companies, and unlike other surveys of equity in private companies, this one does not just focus on high-tech companies or pre-IPO companies (in fact, only 10% of the respondents think they may do an IPO). Some highlights include:

• Forty-seven percent of the respondents use an outside appraiser. The next most common response was to have the board set the figure with advice from an outside professional (20%).
• Almost all the companies give equity to at least some of their C-level executives; 77% of companies give equity to all of these employees.
• Fifty-six percent of the companies provide equity to at least some hourly/non-supervisory employees, and 69% give equity to at least some supervisory/technical employees. C-level employees receive an average of 56% of the awards, other management 19%, supervisory and technical employees 12%, and hourly/non-supervisory employees 4%.
• Two-thirds of the companies use stock options; restricted stock was far less common, at just 29%. Phantom stock, stock appreciation rights, and restricted stock units are all used by under 10% of the companies. The mean percentage of equity held by non-founders through awards was 15%.

Visit our page for the 2011 Private Company Equity Compensation Survey Results for more information or to purchase them ($150 to members, $250 to non-members).