A Presidio Pay Survey found that today's initial public offerings are much more shareholder friendly when it comes to executive compensation. Equity ownership for founders and CEOs dropped by 25% which suggests that owners are giving up more equity to venture capital or private equity before the IPO process begins. The survey, conducted by Presidio Pay Advisors, also found that:
- Stock option overhang levels have fallen from 25-30% to nearly 17%.
- Annual stock option grants were down 20% despite a 67% increase in the number of employees.
- Restricted stock use is up 60% from prior years.
- Over 50% of the companies are public.
"The survey found that today's IPO companies are more 'shareholder
friendly,'" said Kyle Holm, a Principal at Presidio Pay Advisors. "The
companies are more profitable, their average stock option run-rates
declined 20% since 2004, and the majority of their CEO's pay is
delivered through 'at-risk' incentives, rather than guaranteed base
salaries," Holm concludes.