- 28% said more employees are receiving equity than the previous year
- 34% increased the value of equity granted to senior management
- 37% increased the value of equity awards offered to new senior hires and 30.5% increased the value of equity awards for other lower-level new hires
- 45% have increased their rate of capital depletion this year; only 7.5% said it will be lower than 2021
“This result is not surprising,” said Alap Shah, CEO of Pearl Meyer and sponsor of the survey. “We’ve heard from many compensation committees and leadership teams discussing the need to expand equity eligibility in order to be competitive. This speaks to the current difficulty in retaining both top performers and recruiting new talent. However, there is also concern, rightly, about the overall use of shares and shareholder sentiment.”
The survey shows that less than a third (just 29%) consider the value of unearned stock holdings when making new stock award decisions.
“A review of an executive’s unearned equity value can be an important tool for the compensation committee to manage costs, especially when external pressure is so high,” Shah noted. “Having this information at your fingertips provides more accurate context for making decisions and assessing whether or not you really have a retention risk.”
About the survey
The online survey “Equity Granting Trends” was conducted between March 16-25, 2022 and 187 organizations responded. Most survey respondents (76%) said they worked in either human resources or the executive suite and 19% were board members. Full data and analysis are available at www.pearlmeyer.com.
About Pearl Meyer
Pearl Meyer is the primary advisor to boards and senior management on aligning executive compensation with business and leadership strategy, making compensation programs a powerful catalyst for value creation and competitive advantage. . Pearl Meyer’s global clients are at the forefront of their industries and range from emerging high-growth, non-profit and private companies to Fortune 500 and FTSE 350 companies. The company has offices in Atlanta, Boston, Charlotte, Chicago, Houston, London, Los Angeles, New York, Rochesterand San Jose.