The NASPP Blog

For our Meet the Speaker interview this week, we feature…me…discussing the session I’m co-facilitating with Tara Tays of Deloitte that will highlight the results of the 2013 NASPP and Deloitte Domestic Stock Plan Design Survey.  Yes, that’s right–I interviewed myself!

NASPP:  Last week the Wall Street Journal ran an article predicting the demise of stock options.  Based on the data in the 2013 survey, is this true?

Barbara:  I’m not sure I would go quite that far, but we did see a marked decline in the prevalence of stock option plans this year.  Only 68% of respondents report having a stock option plan, down from 92% in 2010.  But that’s still well over half of the respondents that have stock option plans, so I think that option plans still have their place and will continue to be utilized by some companies, particularly start-ups and high-growth companies.

NASPP: If stock options are declining in use, what is taking their place?

Barbara:  It’s pretty clearly full value awards, both time-based and performance-based.  Prevalence of time-based award plans is at 91% of respondents, up from 89% in 2010.  Performance plans are where we’ve seen the most growth, with 87% of respondents reporting a performance plan, up from 71% in 2010. 

These numbers are even more dramatic when we look at the results from ten years ago: at that time only 52% of respondents reported a time-based full value award plan and only 30% reported a performance plan, but 99% reported having a stock option plan.  Over the last decade, the landscape for stock compensation has completely shifted.

NASPP: We been hearing for years now that the future is in TSR awards. Where do these come out in the survey?

Barbara:  I think the predictions about TSR awards might be bearing out. In our 2010 survey, EPS and TSR were tied as the two most popular performance targets but with this year’s survey, TSR has really moved into the lead.  43% of respondents report that TSR is a target for their performance awards; the only other targets that were remotely close to that in terms of prevalence were EPS (27% of respondents) and revenue (21% of respondents).  It’s clear that there’s been an increase in usage of TSR awards over the past three years. There are a lot of very compelling reasons to choose relative TSR as a target and I expect that we’ll see this trend continue.

NASPP: What are three things people don’t know about you:

1. One of my high school math teachers, Mr. Cieply, told me I was “wasting my brain” because I didn’t take calculus. In retrospect, however, I have to say that Mr. Cieply vastly overestimated my aptitude for math.
2. I am a big fan of Rex Stout’s Nero Wolfe novels.  I’ve read the entire 46-book series multiple times. As a leading man, Archie Goodwin beats the pants off both Edward Cullen and that guy from the Shades of Gray books.
3. I really just don’t like pork belly.  I will be very glad when the foodies move on to another trend, hopefully one that doesn’t involve animal fat.  Ew.

I look forward to seeing everyone at the 21st Annual NASPP Conference. Don’t miss my session “The Hard Data: Top Trends in Equity Plan Design,” with Tara Tays of Deloitte co-facilitating and Billy Vitense of Starbucks and Christine Maxwell of Electronic Arts providing color commentary. 

– Barbara