Fewer Stock Options for CEOs

June 20 (PLANSPONSOR.com) - Performance-based incentives and restricted stock awards are replacing stock options as motivators for CEOs of the nation's largest companies, according to a new analysis by Watson Wyatt.

In what the consulting firm described as the industry’s first analysis using 2005 data, the survey showed a 16% decline in the number of stock options awarded to CEOs, on top of a 7% decline in 2004.   “The heyday of stock options is clearly over.” stated Ira Kay, global director of executive compensation consulting at Watson Wyatt, in a press release.

The analysis, gathered from SEC filings at 42 of the nation’s largest companies, also revealed that the economic value of stock option grants increased nearly 7%   in 2005, which Kay attributed to improvements in the economy, corporate performance and stock price.   The analysis also found the value of long-term incentive plans and restricted stock awards increased.   “..which should bode well for executives as the shift away from options continues,” said Kay.

Watson Wyatt Worldwide is a human capital consulting firm, providing services in the areas of employee benefits, human capital strategies and related technology solutions.   You can find out more information about the survey at http://www.watsonwyatt.com/news/press.asp?ID=14776

– Rebecca Moore