Just a short blog today to highlight a single small point I recently saw referenced in a Veritas executive compensation newsletter. For stock options, the wild volatility of the past 3 years may mean a higher FAS/ASC compensation expense than in previous years, thus decreasing their attractiveness to the company.
Compensation Committees frequently ask me about the differences among, and advantages and disadvantages of stock options vs. restricted stock vs. RSUs (and sometimes this is my topic in a seminar presentation). If the Committee does not ask me, often I will try to interject this discussion into the equity compensation process on my own. Anyone who has worked in this area for 20 years or more knows that the relative popularity of each of these equity compensation vehicles has waxed and waned over the years with legal, accounting and perception changes. There is no "right" answer for every company. Different equity award vehicles, including variations on the three listed above (such as ISOs, SARs, SSARs), are appropriate for different companies at different times. Anyone who tells you that one of these vehicles is always the best for all companies is probably trying to sell you something.