Administration June 11, 2002

Stock-based Compensation Linked to Higher Shareholder Returns

November 30, 2000 (PLANSPONSOR.com) - The more stock-based compensation, the higher the total shareholder return, according to a new study by Hewitt Associates.
Reported by

The Hewitt Associates Ownership Intensity and Firm Performance Study found that from 1995 – 2000, the top half of companies surveyed had an average cumulative shareholder return that was 16% higher than the rest of the 173 companies.  In comparing the companies in the top 25% to the bottom 25%, the study found a return gap of more than 65% on average.

Hewitt surveyed 173 major corporations across the nation, ranking them using Hewitt’s “Ownership Intensity Index”, which is the ratio of a firm’s stock-based incentive compensation to its market value.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

The Hewitt Associates Ownership Intensity and Firm Performance Study is the first study to not only look.

– Nevin Adams          editors@plansponsor.com

«