Long-term incentives decreasing in size in U.S.

Survey finds one-size-fits-all not as popular
|hrreporter.com|Last Updated: 10/05/2007

Many companies in the United States are significantly decreasing the size of equity awards to executives outside the U.S. In a survey by HR consulting firm Towers Perrin, only one-quarter of companies in the near future expect to grant the same number of shares to both U.S. and non-U.S. employees at the same level in the organization, abandoning “a once-predominant practice.” Instead of one-size-fits-all, businesses are differentiating long-term incentive award sizes by geography and tying awards closer to local country practices.

The 2007 Global Long-Term Incentive Policies Survey of 61 U.S. multinationals, with median revenues of $21 billion US, also found companies are looking to decrease stock options and restricted stock awards. Instead, they intend to focus on other types of performance-related plans such as performance shares.

Towers Perrin also found more than one-quarter have reduced long-term incentive participation levels and more than one-third plan to either reduce or further reduce future levels.