Percentage of Companies with Broad-Based Equity Plans Dropped Slightly in 2004

The percentage of public and private companies with one or more of any kind of equity compensation plans that specifically offered stock options to nonexempt employees dropped slightly in 2004 compared to 2003, falling to about 13% of the 996 companies responding to the annual WorldatWork Salary Budget Survey (885 of which were public), down from 15% in 2002. 885 of the respondents were public companies. While option usage fell, the use of other kinds of broad-based plans (phantom stock, restricted stock, performance shares, and stock grants) rose slightly, from a combined 5% in 2003 to 6% in 2004. Most of this change occurred in private companies, where stock options for nonexempt employees fell from 18% in 2003 to 10% in 2004, while the use of other kinds of plans increased from 5% in 2003 to 10% in 2004.

The use of all kinds of stock plans for nonexempt employees is down sharply, however, from its peak in 2001, when 28% of responding companies offered options to nonexempt employees. The number now stands about where it was in 1997. For management employees, there has been a decline in the prevalence of stock options, from a peak of over 90% in 2001 to 78% in 2004, but other kinds of stock award plans are up sharply.