Redwood Shores, CA- Equilar, the market leader for executive compensation
benchmarking solutions, today published its latest issue of Executive Compensation
Trends. This month’s issue includes studies on Rule 10b5-1 stock trading plans for
executive officers at Fortune 500 companies and clawback policies at Fortune 100
companies. Key findings are presented below:
Fortune 500 Rule 10b5-1 Stock Trading Plans
- From 2005 to 2006, the prevalence of Fortune 500 companies disclosing active 10b5-1 stock trading plans for executive officers increased from 25.6 percent to 28.7 percent. More strikingly, the number of executives completing transactions pursuant to a 10b5-1 plan increased by 31.2 percent over the same period.
- The prevalence of Fortune 100 companies disclosing clawback policies
increased from 17.6 percent in 2005 to 42.1 percent in 2006.
- In 2006, 77.5 percent of all disclosed clawback policies at Fortune 100
companies listed financial restatements and/or ethical misconduct as the
primary trigger for the recoupment of compensation.
- Clawback policies, or compensation recovery policies, allow companies to
recoup previously earned compensation from executives. Common triggers
for a clawback include ethical misconduct, financial restatements, or the
violation of a non-compete agreement.
- The prevalence of Fortune 500 companies with a CEO who completed at least one transaction pursuant to a 10b5-1 plan increased from 12.4 percent in 2005 to 16.1 percent in 2006. Rule 10b5-1 stock trading plans allow executives, directors and other corporate insiders to sell equity at predetermined prices or dates, thereby minimizing the risk of insider trading accusations. Fortune 100 Clawback Policies
To learn more about these and other findings or to receive a complete copy of
Equilar’s Executive Compensation Trends newsletter, please call 1-877-441-6090 or
visit www.equilar.com.
