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Review of Equity Plans

Many of our clients have approached us to assist in a complex redesign of their current granting practices and strategy. Rather than simply hitting redial on an equity compensation strategy that may no longer fit the needs of your company or your employees, let FAS Solution perform an in-depth analysis of your equity plan data to provide you with the data and analysis you need to make informed decisions about changes to your current strategies.

Our Review and Strategy process involves:

  • Determining company objectives:
    • rewarding performance
    • retaining employees
    • minimizing accounting costs
    • minimizing dilution
    • simplifying plan administration
  • Analyzing information specific to the company:
    • company specific risk (volatility)
    • industry risk
    • correlation with the market (company beta)
    • correlation with peer group companies
  • Analyzing information specific to the employee:
    • risk aversion (desire for diversification)
    • wealth concentration (need for liquidity)
    • expected term of employment
    • level in the company
    • ability to affect company performance

Based on existing research, as well as empirical evidence from survey data, some guidelines can be set forth with the caveat that there is no substitute for learning as much as possible about company-specific employee preferences and performing data analysis.