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IPO and High Tech Equity Survey

High-Tech, IPO companies still believe in stock

Broad-based stock-based compensation plans are by no means new, but have grown in use and importance in the last few years. This increase in popularity has been attributed to the prolific utilization of these plans by high-tech companies and companies that conducted initial public offerings (IPOs) in the late 1990s. According to a recent e-mail survey by WorldatWork, among high-tech and recent IPO companies responding, 84 percent offer stock-based compensation plans. Of those that offer plans, 96 percent offer broad-based plans that make most or all employees in the company eligible for participation.

In these companies, the broad-based plans stretch way down the corporate ladder. Of the companies with broad-based plans, 70 percent or more make employees in all categories (except part-time and contract employees) eligible for participation. Sixty-four percent of respondents have non-U.S. operations included in their plans.

The top form of program companies offer is stock options (96 percent), followed by stock purchase programs (45 percent) and performance-based stock options (21 percent).

Question 1:
Do you have a stock-based compensation plan?

Yes

No

84%

16%

Question 2:
Is your stock equity program:

Broad-based

Executive Only

 

96%

17%

Question 3:
What levels does your broad-based plan include? (Check all that apply.)

Yes

No

Upper Management

100%

0%

Middle Management

96%

4%

Supervisors

89%

11%

Professional Staff

91%

9%

IT Staff

90%

10%

Sales

87%

13%

Technical Staff

90%

10%

Administrative Staff (non exempt)

70%

30%

Contract Employees

9%

91%

Part-time Employees

23%

77%

Question 4:
What plans do you offer? (Check all that apply.)

Yes

No

Stock Options

96%

4%

Restricted Stock Grants

14%

86%

Performance Stock Options

21%

79%

Phantom Stock

4%

96%

Stock Purchase

45%

55%

Question 5:
In the past 2 years, has your company: (Check all that apply.)

Yes

No

Been divested (spun off) from parent company

5%

95%

Divested (spun off) a business unit or portion of the company

25%

75%

Had a reverse split

4%

96%

Had an initial public offering

14%

86%

Merged with or acquired a private company

43%

57%

Merged with or acquired a publicly-traded company

34%

66%

Split its stock

50%

50%

Question 6:
What type of data/information are you most interested in? (Check all that apply.)

Yes

No

Eligibility

54%

46%

Exercise provisions

49%

51%

Global plans

52%

48%

Legislative information

40%

60%

Number of grants given to employee levels

62%

38%

Number of options given to employee levels

88%

12%

Objectives of programs

52%

48%

Outside directors’ stock

15%

85%

Ownership guidelines (Internal and Board members)

22%

78%

Participation levels

54%

46%

Performance stock options

40%

60%

Pre-IPO stock plan preparation

35%

65%

Restricted stock

19%

81%

Software (stock administration)

28%

72%

Splits and Reverse splits

16%

84%

Stock administration via vendor

22%

78%

Stock option terms

43%

57%

Stock reloads

17%

83%

Stock repricing

31%

69%

Transferability

20%

80%

Use of phantom stock (and ownership simulation)

23%

77%

Use of stock as long term incentive

70%

30%

Use of stock as retention bonus

73%

27%

Use of stock as sign on bonus

63%

37%

Vesting schedule data

69%

31%

Question 8:
Do you have non-U.S. operations included in the stock compensation plan?

Yes

No

64%

36%