Executive Compensation: Realized Option Pay

by Malak Kazan, CECP, CCP, CBP, GRP 26. April 2011 13:50

The October 2010 study on executive compensation, “What do CEOs Realize from Option Pay?” by Mark Anderson and Volkan Muslu of the School of Management, the University of Texas at Dallas, looks at the estimated fair market value versus realized value of CEOoptions pay relative to incompleteness of option transfer rights and tenure with company.

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Executive Compensation: Reporting Equity Values

by Malak Kazan, CECP, CCP, CBP, GRP 25. April 2011 12:56
Executive compensation is almost synonymous with equity compensation given that 60% or more of executive pay is aligned with equity instruments. The two most prevalent pricing models used to value equity compensation are Black Scholes and Binomial (Lattice). Understanding the fundamental design of these models can aid the executive compensation practitioner to manage the information requirements for disclosure, to assess effective equity plan designs, and to enhance compensation communications. [More]

Navigating the Executive Compensation Disclosure Maze

by Malak Kazan, CECP, CCP, CBP, GRP 7. April 2011 12:31
How executive compensation is disclosed in SEC filings still requires additional effort to “tell the story” so that shareholders and the general public can answer this key question: Is the executive’s annual compensation aligned to performance? [More]

Plan Ahead for Executive Compensation Consultant Independence

by Malak Kazan, CECP, CCP, CBP, GRP 29. March 2011 13:28

Additional Dodd Frank rules related to executive compensation will likely be approved before the end of 2011. One of the rules is disclosure of compensation consultant independence. The rule will likely require disclosing answers to the following questions:

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Executive Compensation: Pay for Performance Incentives Plans

by Malak Kazan, CECP, CCP, CBP, GRP 4. March 2011 14:44

As part of ERI's Executive Compensation Index and tracking the highest paid executives in 45 top publicly traded US firms, cash bonuses have shifted to cash incentives. From 2006 thru 2009, 71% of the companies paid no cash bonuses in at least three of the four years. While these firms did not pay cash bonuses as defined by the SEC, they did, however pay compensation as non-equity incentives. In the same 4-year period, 80% of the companies paid some amount in non-equity compensation which is the compensation component where performance based cash incentive plans are reported.

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