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Equilar Study Shows Performance-Based Equity Now Used by Majority of S&P 1500

E*TRADE Provides Expertise in the Latest Equity Pay Trends Report

Redwood City, CA (July 8, 2014)—Equilar, the leader in executive compensation benchmarking and governance research, today announced the release of its latest report covering equity pay trends. The 2014 Equity Trends Report was written in conjunction with E*TRADE Financial Corporate Services and provides insight and analysis on how America’s top companies are using equity to compensate their top executives.

“The vehicles and features that companies use in their equity plans are vital components of their overall governance goals,” said Aaron Boyd, Equilar’s Director of Governance Research. “The last year witnessed the continuation of a long-term shift from options to performance-based, full-value shares, mirroring the increased emphasis placed on performance equity by institutional investors and proxy advisors.”

The research shows that over the last five years, a large set of companies stopped granting options. In 2009, 77.2% of companies granted options, a share that has since decreased to 63.9%. Also, the share of companies granting performance-based equity increased from 45.5% in 2009 to 68.9% in 2014. This change would be expected if performance shares were the type of equity used as a substitute for options.

“Performance-based equity provides employees the benefit of full-value shares while allowing the company to tie awards to company, team or individual performance,” said Paul Hutchison, President of E*TRADE Corporate Services. “In a way it is the best of options and direct stock grants, but these performance-based vehicles come with a significant level of complexity. Education and communication before, during, and after rollout is a critical component of a successful performance-equity program.”


About Equilar

Headquartered in Redwood City, Calif., Equilar is the leading provider of executive compensation data and governance tools for corporations, nonprofits, consulting firms, institutional investors, and the media. As the trusted data and executive solutions provider to 70% of the Fortune 500, Equilar helps companies accurately benchmark and track executive and board compensation, pay for performance results, and compensation practices. In addition, Equilar offers a leading business and event networking solution focused on serving executives and board members. Equilar’s research is cited regularly by Bloomberg, The New York Times, The Wall Street Journal, and other leading media outlets.

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