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Retention Awards for Financial Industry CEOs

November 4, 2014

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How Are Companies Designing Retention Awards to Retain Top Executives?

With the improving economy and increased competition for talent, our clients’ interest in the prevalence of retention awards and best practices for top management has increased accordingly. One of our recent custom research projects explores retention awards for a sample of CEOs in the REIT and financial services industries. This highlights how companies are structuring retention awards to retain their top leaders, as well as the trends in award types, valuation, and vesting schedules.

Cubesmart Retention Awards

CubeSmart, one of the 20 companies included in this analysis, awarded a retention grant in May 2012 to its then CEO, Dean Jernigan. The intent of the award was to promote retention by solidifying an effective leadership transition and aligning the interests of the CEO with those of long-term shareholders. The grant consisted of 274,668 performance units at a grant date fair value of $3,040,575. It was subject to both continued employment through his retirement and the achievement of stock price performance during the measurement period ending on June 30, 2014.