Equity Stake

A major reconfiguration of corporate equity use continued in 2007, even as expanded SEC disclosure requirements yielded new details about the use of stock-based incentives to reward executives, employees and Directors. Pearl Meyer & Partners' annual study of corporate filings at the Top 200 U.S. industrial and service companies examined trends in equity pay practices among the 200 largest U.S. industrial and service companies, including:

• Companies for the fourth straight year made sharp reductions in median shares authorized, putting dilution at its lowest level in a decade
• The median percentage of shares granted annually for equity incentives fell to its lowest level since 1997, with half of the Top 200 granting under 1% of shares outstanding.
• The proportion of annual equity provided in full-value shares more than tripled over the past three years, driven in large part by the implementation of mandatory expensing of stock options under FAS123R.