Dan Walter, Performensation Restricted Stock Shares (RSS), often called Restricted Stock Awards (RSA) or even more simply Restricted Stock, have been used longer than any other equity compensation instrument. Companies have used variations of restricted stock for almost as long as stock has existed. While ISOs and NQSOs are “appreciation only” awards, RSSs are Full...
Let’s get the obvious out of the way. Yes, CEOs want to make sure they are paid well. Paid well when compared to peers. Paid well when compared to last year’s pay. Paid well when they do a great job. And, of course, still paid pretty well when they don’t do such a great job....
Dan Walter, Performensation Non-Qualified Stock Options (NQSOs, NQs, NSOs) should really be called Stock Options. Non-qualified (or non-statutory) makes them sound negative. The negative modifier simply refers to the fact that these stock options have no special section dedicated to them in the IRS tax code. Like Incentive Stock Options (ISOs), NQSOs are generally appreciation-only...
Second Edition by Corey Rosen, Pam Chernoff, Elizabeth Dodge, Daniel Janich, Scott Rodrick, and Dan Walter This book describes the full spectrum of equity compensation plans (such as stock options, stock purchase plans, stock grants, restricted stock, phantom stock, and stock appreciation rights) available to private and public companies as well as LLCs. Unlike
Incentive Stock Options are a great place to start talking about equity compensation. ISOs are “appreciation-only” vehicles, meaning they have direct value to employees only if the stock price appreciates above the initial grant price. Other common appreciation-only instruments include NQSOs and SARs (to be covered in future posts). If you understand ISOs, you can...
How much are your compensation programs like an analog clock? Analog clocks are some of the most perfect devices ever created. They provide a sense of order and clarity to the world through the use of only two or three lines. This simplicity allows them to be understood by people regardless of language. They can...
Pay for Performance (P4P) is currently the biggest trend in compensation. I am a huge proponent of this effort, but I also fear its failure. Too often I see companies believe that just the existence of such a program will improve performance. Let me dispel this myth.
This article carries forward the theme started with a question about what to do when a company can’t or doesn’t want to offer stock options. My first response, “Competitive Compensation Without Stock Options,” covered units, phantom awards and appreciation rights. The world of Long-term incentives (LTI) is vast. Some companies get comfortable with one “family”...
Earlier this week, fellow Comp Café-er Stephanie Thomas, wrote an article titled The ‘God Particle’ of Total Rewards. In it, she discusses the Higgs boson particle that seemingly holds the key to why things have mass and the secret ingredient in compensation programs – people – and how they hold things together. This got me thinking about...
Archery is an interesting sport. Great archers hit the center of the target nearly every shot. For those of you who have never shot a bow and arrow, you might be surprised that to hit the target you have to aim somewhere else. Sometimes you must adjust for the wind. Other times you must adjust...
