Thoughts on Employee Compensation and Stock Plans

Friday, March 27, 2009 3:55PM

By: Mark Bonham

Most technology companies use equity in the company as part of the overall employee compensation program. Historically stock options and restricted stock units have been the most common methods used for employee compensation. In the case of a broader down market like what we have seen in 2008 and 2009, options are not likely to be of much retention value regardless of the employee performance. Restricted stock units maintain value even when the company is not performing as well as its peers.

The following article from compensia.com has a good discussion on issues related to stock options and restricted stock units and a category called Performance Shares. Download the report here. We recommend this for consideration as part of the overall compensation package for key employees.