Equity Usage — Managing the Compensation Committee’s Largest Investment
Description
On today’s episode, Dan Kaufman, Partner at Meridian Compensation Partners, LLC, based in Atlanta, breaks down why equity can be the biggest compensation bet a board makes and how to spot when that bet is getting too expensive.
Key Takeaways:
00:00 Introduction.
02:33 Equity programs need board oversight because expense and dilution directly affect shareholders.
04:49 Run rate tracks annual shares granted versus common shares outstanding.
07:06 Share price swings can inflate run rate, so benchmark total grant value against peers, revenue or profit.
10:21 Equity depth in the org and vehicle mix are major drivers of dilution.
10:56 Stock options usually require more shares than full-value awards to deliver the same value.
15:33 To stretch a low reserve, shift equity mix, use more cash, delay or split grants, or use inducement awards for new hires.
24:23 Even if proxy advisors flag a plan, reasonable share requests typically pass with proactive shareholder outreach.
This episode is brought to you by Meridian Compensation Partners, LLC. Learn more by visiting MeridianCP.com.
#Compensation #Wages #SPAC
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