Equilar® Releases New Studies on Executive 10b5-1 Trading Plans and Clawback Policies
For Release: October 2, 2007
Redwood Shores, CA - Equilar, the market leader for executive compensation benchmarking solutions, today published its latest issue of Executive Compensation Trends. This month’s issue includes studies on Rule 10b5-1 stock trading plans for executive officers at Fortune 500 companies and clawback policies at Fortune 100 companies.
Fortune 500 Rule 10b5-1 Stock Trading Plans
From 2005 to 2006, the prevalence of Fortune 500 companies disclosing active 10b5-1 stock trading plans for executive officers increased from 25.6 percent to 28.7 percent. More strikingly, the number of executives completing transactions pursuant to a 10b5-1 plan increased by 31.2 percent over the same period.
The prevalence of Fortune 500 companies with a CEO who completed at least one transaction pursuant to a 10b5-1 plan increased from 12.4 percent in 2005 to 16.1 percent in 2006.
Rule 10b5-1 stock trading plans allow executives, directors and other corporate insiders to sell equity at predetermined prices or dates, thereby minimizing the risk of insider trading accusations.
Fortune 100 Clawback Policies
The prevalence of Fortune 100 companies disclosing clawback policies increased from 17.6 percent in 2005 to 42.1 percent in 2006.
In 2006, 77.5 percent of all disclosed clawback policies at Fortune 100 companies listed financial restatements and/or ethical misconduct as the primary trigger for the recoupment of compensation.
Clawback policies, or compensation recovery policies, allow companies to recoup previously earned compensation from executives. Common triggers for a clawback include ethical misconduct, financial restatements, or the violation of a non-compete agreement.
To learn more about these and other findings or to receive a complete copy of Equilar’s Executive Compensation Trends newsletter, please call 1-877-441-6090 or e-mail us.
