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.
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