New research on the pay practices of privately held companies conducted by WorldatWork and Vivient Consulting shows that a majority of these organizations now offer long term incentives. The survey, previously conducted in 2007, reflects the practices of 232 private U.S. companies with revenues ranging from $100 million to more than $5 billion.
Study findings show that long term incentive prevalence at private companies - despite the challenges these organizations face in terms of valuation, liquidity and ownership considerations - has increased from 35% in 2007 to 61% in 2011.
The types of long term incentive plans most widely used among participating companies include:
- Performance awards or long term cash plans - 52%
- Phantom stock and stock appreciation rights (SARs) - 33%
- Stock options - 26%
- Restricted stock - 19%
The study also notes that the use of short term incentive plans among private companies has increased since 2007, from 79% to 95%.