Build Strong, Balanced Equity Compensation Plans

Capital stock is the lifeblood of the modern public corporation, enabling growth, supporting mergers and acquisitions, and attracting talent through equity-based compensation. In addition, incorporating restricted stock or option into compensation plans is seen as one way to align pay with company performance. However, since stock represents institutional investors’ sole ownership interest in the underlying company, shareholders expect executive management and boards to be good stewards of this valuable resource. The recent outpouring of shareholder frustration with executive pay demonstrates the need for objective analysis and modeling tools to support equity-based compensation plan design.

To help you meet shareholder expectations in equity stewardship, as well as to provide an objective basis for your executive compensation plans or other equity activities, Risk Metrics Group offers a set of tools and services for modeling executive compensation, changes in capital structure and stock option exchange.

These services include:

Compass Compensation Advisory Option Exchange Advisory Capital Structure Advisory

Our compensation modeling solutions are centered around RiskMetrics Group's binomial option pricing model and Shareholder Value Transfer (SVT) methodology. We have used the binomial method to value stock-based incentive plans since 1996, well before the Financial Accounting Standards Board's March 2004 recommendations on option valuation techniques. More than 70 percent of large institutions surveyed now use this option-pricing model to assess plan cost when analyzing compensation issues.

Please contact us for more information about Compensation Modeling.

In accordance with our Business Practices, these solutions are delivered by ISS Corporate Services, Inc. (ICS), a wholly owned subsidiary of RiskMetrics Group, Inc.