High-tech companies are continuing to migrate away from stock options toward restricted stock awards as a method of rewarding and incentivizing their top people, while mature companies are moving in the opposite direction, according to the latest data from PwC.

In 2010, high-tech companies continued to favor stock options over restricted stock by a margin of nearly 70/30, PwC says in its 2013 stock compensation assumption and disclosure survey results, but by 2012, the split was closer to 60/40. For mature companies, stock options only represented 30 percent of awards compared to 70 percent for restricted stock, and by 2012, the ratio was close to 50/50.

“Generally, we are seeing the trend away from the use of stock options and more toward the use of restricted stock because unrestricted stock is an unleveraged instrument,” says Ken Stoler, a partner at PwC. “Some of the shareholder advisory firms out there are less fans of stock options than of restricted stock.” Companies might also be gravitated toward restricted stock because it better aligns management with all other shareholders of the firm, he says.

Stoler says he doesn't believe companies are moving away from stock options because of the accounting, which got more complex in 2005 when the Financial Accounting Standards Board began requiring companies to value stock options and show them as an expense in the income statement. The PwC survey also found that companies are favoring the Black-Scholes model for establishing values for their stock option awards, with 83 percent of high-tech companies and 85 percent of mature companies relying on Black-Scholes entirely. Only 7 percent of emerging companies and 14 percent of mature companies preferred a lattice model.

On the pension side, companies have steadily lowered the discount rate used to measure their pension liability, from an average of 6.25 percent in 2007 to 4.75 percent in 2011 and 4 percent in 2012, PwC says in its 2013 survey of assumptions and disclosures around pension and other post-employment benefits. Return on plan assets fell from an average of 8.3 percent in 2007 to 8 percent in 2011 and 7.75 percent in 2012, the report says.

“I think what we've seen on the pension side probably isn't a surprise given the current economic environment,” says Stoler. “The discount rate is highly correlated with the interest rate environment, and the interest rates at year-end 2012 were at historic lows.” The low discount rates have pushed pension liabilities up, he says.

The survey results provide plenty of other insights into key assumptions and disclosures that public companies are making around stock compensation, pension, and other post-employment benefits, says Stoler. “Companies are always interested in how they stack up against their peers and their competitors,” he says. “This is not going to serve as a basis for how a company would support its own numbers, but companies are always interested in whether they are in the middle of the road or an outlier at one end or another of a range.”