Executive Stock Ownership Guidelines
As scrutiny of executive pay continues to increase, a key mechanism for aligning the interests of executives with those of shareholders is the use of stock ownership guidelines. A large portion of executive pay is already often in the form of company stock or related equity instruments. But whether executives’ incentives are truly aligned with the long term interests of shareholders is dependent on what they choose to do with their stock awards. An executive who is able to divest or hedge their investment in the company does not necessarily have the same interests as one who holds a substantial stake. This is where stock ownership guidelines can realign interests by requiring certain ownership levels and imposing restrictions on share use until those levels are met.
Published by Equilar, this report examines trends and components of executive stock ownership guidelines from Fortune 100 companies, and features commentary from David Outlaw of Equity Methods and Seamus O’Toole of Semler Brossy.
Click here to download the report.