Insights

Stock Option Fundamentals

What you need to know about stock options in the executive compensation context.

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Description A stock option is a right to purchase employer stock at a fixed price (e.g., an “exercise price”) during a specified period of time. Key Features Exercise Price The exercise price generally is equal to the underlying stock’s fair…

Fundamentals of Long-Term Incentives

Pros and cons of the three most common categories of long-term incentives.

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Long-term incentives (“LTI”) are forms of variable (“at risk”) compensation based on the achievement of longer-term performance and objectives. Primary objectives are to: Align executive interests with shareholders and align executive pay with company performance and strategy. Balance annual incentives…

Stock Ownership Guidelines

What factors to consider when designing stock ownership guidelines.

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The Basics What are stock ownership guidelines? A stock ownership guideline is a policy created by the compensation or governance committee which establishes the level of stock ownership that is expected for the executives or outside directors of a company.…