Page 554 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

540 The Complete Guide to Executive Compensation

could be expanded to a rating scale of zero to five. The higher the scale, the more calibration
required in setting the relative ratings of the 14 objectives.
This is a scaled-down illustration, but it should provide a basis for constructing one’s own
table of objectives, weighting their relative importance, and rating their strength against
specific plans.
Combination Stock Options, Stock Appreciation Rights, and
Stock Award
Using the alternatives shown in Table 9-15, it is possible to create literally hundreds of
possible combinations using stock options, stock appreciation rights, and/or stock awards.

Variations in Stock Options and Stock Appreciation Rights
Grant frequency
• Annually
• Less frequently
• More frequently
Option price
• Nondiscounted
• Discounted
• At grant
• Later
• Single premium
• Multiple premium
• Indexed
• Performance
Dividend equivalents
• On all options
• Only on those underwater
Term
• Shorter than 10 years
• Ten years
• Longer than 10 years
• Performance determined
Vesting
• Time only
• Performance accelerated
• Performance required
Number of shares
• Fixed
• Performance adjusted
• Index adjusted
Table 9-15. Variations in stock options, stock appreciation rights, and stock awards
(Continued on next page)