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INTERACTIVE EXERCISE
It is common for executives in publicly traded companies to receive a mix of equity and non-equity compensation in addition to a base salary. These awards are intended to align the interests of a company’s senior management with those of the shareholders and are incentives to create long-term growth and value in the company. ERI’s Executive Compensation Assessor provides not only senior management base salaries, but also bonus, non-equity and equity awards for comparable companies.
Problem Statement
You work for Oil Discovery & Development corporation (OD&D). The company’s CFO is a valued member of the organization, and the Board of Directors wants to be sure her equity compensation package is comparable to what is being offered to other CFOs in the industry. You have been asked to review her package.
OD&D is in the Oil and Gas Exploration and Extraction industry. It has annual revenues of $7 billion.
The CFO has the following equity compensation:
- Stock Options - $500,000
- Stock Awards - $2,600,000
Since OD&D is a large company, you will look at what comparable companies nationwide offer their CFOs.
You will use ERI’s Executive Compensation Assessor (XA) to compare your CFO's equity awards with those of other CFOs in companies of similar revenue size in the oil and gas exploration and extraction industry.
Instructions
Please click on the Load Step-by-Step button to open the following tutorial. (This will open as a PDF in a new window.)