Despite all the talk about companies switching from stock options to restricted stock or performance-based awards as part of their executive compensation plans, only a "very few" technology are abandoning stock options, indicates a study from DolmatConnell & Partners. "While firms are generally employing more restricted stock and performance-based LTI [long-term incentive] plans . . . firms are nearly always combining such awards with stock options," says the Waltham, Mass., compensation consulting firm.
Indeed 2005 was the first year that a majority of technology firms used an incentive strategy that went beyond only stock options. While stock options remained the most popular LTI award, only 34% of the companies DolmatConnell studied used only stock options; 53% chose a "portfolio" of awards.
The study sample was the 100 largest publicly held technology companies, a group with a median revenue of $3.7 billion and a median market capitalization of $8.4 billion. The study covered CEOs, COOs, CFOs and general counsels.