Tech Firm Survey Finds Equity Plan Shifts

A February 2006 survey of 90 high-tech companies by Culpepper & Associates shows that 38% of the companies are cutting back on who is eligible for equity-based pay, 3% are expanding eligibility to lower levels, and 59% are keeping their existing penetration. Forty-eight percent of the companies are reducing the number of employees receiving stock options, and 44% are reducing the number of options granted. One-third of the companies are replacing some or all of the options with restricted stock while 19% are replacing them with performance shares. Despite a lot of conversation about using stock appreciation rights, only 5% of the companies said they were switching to this approach.

On the ESPP front, 59% of the companies said they were changing their plans, with 26% eliminating the "look-back" feature, 24% reducing the discount, 17% eliminating the plan, and 7% doing something else with it (the numbers add up to more than 56% because some companies make more than one change).