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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%