Skip to Main Content


Report Sheds Light on Stock Ownership Guidelines

(The following post originally appeared on ONSecurities, a top Minnesota legal blog founded by Martin Rosenbaum to address securities, governance and compensation issues facing public companies.)

October 20, 2011

Stock ownership guidelines have become a common governance tool for encouraging stock ownership by executives and directors. A recent post on the NASPP Blog by Executive Director Barb Baksa provided useful insight and data on public companies’ stock ownership guidelines. The Blog is sponsored by the National Association of Stock Plan Professionals, and the post reported results from the NASPP’s 2011 Domestic Stock Plan Administration Survey, co-sponsored by Deloitte. The survey included around 600 U.S. companies, with all but a small percentage included on the New York Stock Exchange or Nasdaq.

Highlights included:

  • 73% of 2011 respondents reported having stock ownership guidelines, compared to 54% of respondents in the 2007 survey, a 35% increase.
  • Of the 2011 respondents that don’t currently have guidelines, 25% said they are considering implementing them in the next three years, which would bring the percentage close to 80%. As Barbara said, “All the cool kids are doing it, is your company one of them?”
  • All respondents count shares owned outright in the guidelines, whether the shares were purchased or received as compensation. Regarding other forms of equity ownership, 70% of the respondents count unvested restricted stock and 60% count unvested RSUs and phantom stock and 31% count unvested performance shares.
  • Stock option practices vary widely: 72% of the companies do not count stock options; 15% count only vested in-the-money options, 9% count any vested options and 5% (around 30 companies) count even unvested options.
  • Required ownership levels are based on a multiple of compensation at 78% of the respondents, with 68% allowing up to five years to meet the guidelines, and another 13% percent requiring guidelines to be met in three years. 74% of respondents require the CEO to own stock equal in value to five or more times his/her compensation. For the CFO and other named executives, 78% of respondents indicated a range of two to four times their compensation.

NASPP is a great source of information on compensation and disclosure-related topics like stock ownership guidelines. NASPP’s subscription website provides very valuable information on plan drafting and other topics. At the 19th Annual NASPP Annual Conference coming up in San Francisco November 1-4, NASPP is providing cutting-edge presentations on these topics.

Disclosure: I am currently the President of the Twin Cities Chapter of NASPP.

Death, Taxes and Senior Executives

I am excited to report that I will be part of a panel discussion at the Annual Conference on the topic of “Death, Taxes and Senior Executives”. The panel will focus on trends in estate planning and wealth management for public company executives who have a great deal of wealth tied up in their company’s equity. The purpose is to educate stock plan administrators and other professionals on these techniques so they are better able to anticipate the issues that might be presented by the transfer of equity to family and charitable trusts. We will try to demystify the alphabet soup of techniques used by estate planners: GRATs, CRUTs, CRATs, IDGTs (intentionally defective grantor trusts) and many more.

The panel also will discuss the current regulatory and governance trends that tend to create additional restrictions on the equity held by executives. The stock ownership guidelines described above are an example of restrictions that make it more difficult for executives to diversify their holdings.


Thank you for your interest in contacting us by email.

Please do not submit any confidential information to Maslon via email on this website. By communicating with us we are not establishing an attorney-client relationship, and information you submit will not be protected by the attorney-client privilege and cannot be treated as confidential. A client relationship will not be formed until we have entered into a formal agreement. You should also be aware that we may currently represent parties whose interests may be adverse to yours, and we reserve the right to continue to represent them notwithstanding any communication we receive from you.

If you would like to discuss possible representation, please call one of our attorneys directly or use our general line (p 612.672.8200). We can then fully discuss our intake procedures and, if appropriate, introduce you to an attorney suited to assist with your matter. Alternatively, you may send us an email containing a general inquiry subject to these terms.

If you accept the terms of this notice and would like to send an email, click on the "Accept" button below. Otherwise, please click "Decline."