For the month of December, our three feature articles focus on recent actions taken by companies to retain and motivate key employees during a challenging economic environment. First, we examine completed, active, and proposed stock option exchange programs in 2008. Next, we shift to some unique examples of special retention awards at Fortune 500 companies, with an emphasis on performance and broad-based scale. Finally, we close with a brief look at recent examples of pay reductions for executives and non-employee directors.

Feature Articles                                                         

Option Exchange Follow-Up
An Overview of Option Exchange Programs in 2008

An Equilar analysis of completed, active, and proposed stock option exchange programs in 2008 reveals the following key findings:

• Only 26.0 percent of exchange programs replace underwater options with full-value shares or units. The majority, a full 62.0 percent, exchange options for options.
• Two-thirds of exchange programs exclude non-employee directors from participating, and 42.0 percent of companies exclude executive officers.
• Nearly 60.0 percent of exchange programs apply additional vesting requirements on new equity granted during the exchange.

Read the Full Option Exchange Story

Special Awards on the Rise
Examples of Retention Awards at Fortune 500 Companies

With companies under increasing pressure to attract and retain key employees during difficult economic times, the prevalence of special retention and performance awards has increased significantly in the past year. In this short article, Equilar clients can access a few of the more unique examples of special awards.

Read the Full Special Awards Story

Pay Reductions and Other Changes
Examples of Recent Changes to Compensation Programs

While examples of forfeited bonuses steal headlines, companies are pursuing a number of diverse strategies to reduce compensation expenses and improve the link between pay and performance. In this example-driven article, Equilar clients can access recent pay reduction examples.

Read the Full Pay Reductions Story

Equilar in the News                                                   

Research and commentary from Equilar appeared in several articles in November. To read more about the latest in compensation news, click on the links below. For a complete list of articles featuring Equilar research, visit the news and publications section of our website.

No Bonuses for Top Goldman Executives November 17, 2008
"Executive compensation consulting firm Equilarsearched its database for BusinessWeek and turned up several recent examples of CEOs far from the bailout's epicenter whose pay had been trimmed, including Gannett's chief, who is taking a 17% pay cut."
Art Imitates Life for Lehman CEO November 13, 2008
"Fuld collected $10,900,000 in base salary and $77,475,000 in cash bonuses during his 14 years as Lehman's chief. Most recently, he also reaped $539,909 from the sale of more than 2.5 million Lehman shares in September, according to Equilar, Inc., an executive compensation research firm and data provider."
Silicon Valley Drowning in Underwater Stock Options November 7, 2008
"Now, the problem might be even bigger. More than 80% of Silicon Valley's 150 largest publicly traded companies had some employees holding options that had fallen below the strike price as of Oct. 24, according to Equilar, an executive compensation research firm. Equilar said about 90% of chief executives at those companies had underwater stock options."
Gannett's Chief Gives Himself A 17 Percent Salary Reduction November 5, 2008
"Beyond the debate on Capitol Hill, some who study executive compensation said many corporate chiefs are likely to see cuts in pay this year as the downturn puts pressure on corporate earnings and shareholder scrutiny mounts. 'It is certainly a sign of the times,' said Alexander Cwirko-Godycki, research manager of Equilar, a provider of executive compensation data."
C-sweet Payloads at Automakers Next in Headlight November 2, 2008
"'Anytime a company is losing money, which you've certainly seen in the auto industry, people might look at every dollar of executive compensation and say it's excessive,' said Alexander Cwirko-Godycki, research manager at Equilar. He noted that it's easier to target the auto companies because there are so few of them, which makes it difficult to match pay against peer groups."
Interested in more media mentions from November? Click here.