Every month, Compliance Week publishes a list of the largest stock option grants and restricted stock awards during the previous period. The data and analysis are provided by compensation research firm Equilar.

THE DATA

Note

Please note that all values are rough "face value" numbers, which are calculated by data provider Equilar, Inc., by multiplying the number of shares in the grant by the market price per share on the grant date.

Latest Data

The spreadsheet below also includes the "Top 10" lists for each month year-to-date.

View The Top Equity Awards Made In Feb. 2006

Prior Years' Data

Last Year: View Equity Awards From Each Month In 2005

Prior Data: View Equity Awards From Each Month In 2004

Source: Equilar, Inc.

Form 4 Filings

Below are copies of the actual Form 4 filings for some of the executives mentioned in the article at left:

View The Grant To Wells Fargo's Richard Kovacevich

View The Grant To Aetna's John W. Rowe

View The Grant To Danaher's Lawrence Culp

View The RSUs Awarded To ConocoPhillips' James Mulva

Kovacevich

The largest stock option grant in February went to Richard Kovacevich, the chairman and CEO of Wells Fargo. On Feb. 28, Kovacevich was granted 903,230 options with a face value exceeding $58 million, based on the grant date stock price of $64.49. According to Kovacevich's Form 4 filing, the award represents three separate option grants of equal size, each of which expire eight years from the grant date (see spreadsheet of top grants and related Form 4s in box at right).

Two weeks before the grant, Wells Fargo had announced record 2005 revenues of $33 billion, up 10 percent from 2004, and record net income of $7.7 billion, up 9 percent from the prior year.

Rowe

Two other executives were granted stock options in February with face values exceeding $50 million. John Rowe, chairman of Aetna, was granted 500,000 "stock appreciation rights" with a face value of $50.2 million, based on a Feb. 10 grant date stock price of $100.41; and Lawrence Culp, the president and CEO of Danaher Corp, was granted 810,500 options with a face value of $50 million, based on the Feb. 27 grant date stock price of $61.69.

Both companies have performed well in recent months. The day before Aetna made its grant to John Rowe, the company reported 2005 revenues of $5.9 billion, up 14 percent from 2004; net income was up 41 percent during the same period. And sales at Danaher were nearly $8 billion in 2005, up 16 percent from 2004.

Mulva

The largest stock award in February 2006 went to James Mulva, the president and CEO of ConocoPhillips. On Feb. 10, Mulva was awarded 381,442 RSUs with a face value of $22.6 million, based on the grant date stock price of $59.35.

Mulva also was granted 268,800 stock options at an exercise price of $59.08; according to his Form 4 filing (see box above, right), Mulva's stock options become exercisable in three equal annual installments beginning on Feb. 10, 2007.

Like many companies in the oil and gas industry, ConocoPhillips has been on a tear recently. Two weeks before the award to Mulva, the company reported 2005 revenues of $183.4 billion, up from $ 136.9 billion in 2004; net income was a record $13.6 billion.

Continuing Trends

According to Equilar, the grants and awards made in February 2006 continue a number of trends identified in prior months. Among the trends: companies continue to issue performance-based options and stock, and option terms continue to decrease in length. Examples of each trend can be found below:

Shortened Option Term Length

On Feb. 24, $4.4 billion Big Lots granted options to nine executives with an option term of seven years. During the previous fiscal year, the company granted options with a term of ten years.

Furniture retailer Cost Plus granted options to seven executives on Feb. 14 with a term of seven years. During the previous fiscal year, the company granted options with a term of ten years.

Premium-Priced Options

On Feb. 9, Tractor Supply Co. granted options to six executives. The chairman’s grant had an exercise price 13 percent higher than the company’s closing stock price of $59.55 on that date, while the other executives received options with an exercise price at fair market value.

Performance-Based Options

On Feb. 13, the $1.5 billion Apartment Investment and Management Co. granted options to its chairman and CEO with the following performance-contingent criteria:

“This option grant vests on the first anniversary of the grant date and shall be forfeited in its entirety and shall not be exercisable unless the issuer achieves $2.40 of adjusted funds from operations in 2006.”

On Feb. 16, Qwest Communications awarded options to its CEO and CFO with the following performance-contingent criteria:

“This award vests, if at all, on February 16, 2010 if the reporting person is employed by Qwest on such date and if either (A) the closing price of Qwest common stock has averaged $7.50 per share or above for any period of 188 consecutive trading days during the period from February 16, 2006 to February 16, 2008, or (B) the closing price has averaged $8.00 per share or above for any period of 188 consecutive trading days during the period from February 17, 2008 to February 16, 2010. If the closing price has averaged $7.50 per share or above for consecutive days ending on February 16, 2008 and the closing price has averaged $8.00 per share or above for consecutive days beginning on February 17, 2008, these consecutive day periods will be added together for purposes of determining vesting. Vesting may be accelerated in the event of the reporting person's death, disability, termination for constructive discharge or termination without cause, or if there is a change in control of Qwest.”

On Feb. 7, $27 billion Hartford Financial Services Group Inc. granted options to seven executives with the following performance-accelerated criteria:

“The option becomes fully exercisable upon the later of: (i) the date on which the closing stock price on the New York Stock Exchange equals or exceeds 125% of the exercise price for 10 consecutive trading days or (ii) February 15, 2009, three years from the date of the grant.”

Performance-Based Restricted Stock / RSUs

On Feb. 15, E*Trade Financial Corp. granted restricted stock to six executives with the following performance-contingent criteria:

“Grant of restricted stock issued pursuant to the E*TRADE Financial Corporation 2005 Equity Incentive Plan. The individual's right to retain these shares vests in four (4) equal annual installments beginning on the first anniversary date of the grant; provided, however, that the individual's right to vest in some or all of the shares terminates immediately upon a determination by the Compensation Committee (ratified by the Board of Directors) that performance metrics for 2006 have not been met.”

On Feb. 22, $5.2 billion Lexmark International granted restricted stock units to its chairman and CEO with the following performance-contingent criteria:

“Represents an award of an equal number of performance based restricted stock units pursuant to the Issuer's stock incentive plan. The units will vest and settle in three approximately equal installments (34%, 33%, 33%) no earlier than February 22, 2008, February 22, 2009 and February 22, 2010, respectively, if certain performance criteria are met for each individual tranche. If the established performance criteria are not met by February 22, 2013, any unvested portion of the grant remaining will expire on that date.”

On Feb. 1, Lockheed Martin granted restricted stock units to nine executives. The grant to the president and CEO contained the following performance-contingent criteria:

“The RSUs are subject to a one-year performance period. If the value of the RSUs on the date of grant exceeds the performance goal specified in the award agreement, a number of RSUs equal in value to the performance shortfall is forfeited. Subject to the performance goal: 40,000 of the RSUs vest on February 1, 2009; 55,200 of the RSUs vest on September 8, 2011; and the remaining 36,800 RSUs vest in equal annual installments of 7,360 RSUs for each of the next 5 years beginning on September 8, 2012.”

The restricted stock units granted to the other eight executives contained the following performance-contingent criteria:

“The RSUs are subject to a one-year performance period. If the value of the RSUs on the date of grant exceeds the performance goal specified in the award agreement, a number of RSUs equal in value to the performance shortfall is forfeited. Subject to the performance goal, the RSUs vest on February 1, 2009, the third anniversary of the date of the grant.”

The complete spreadsheet of the top February 2006 option grants and stock awards, as well as a spreadsheet of the top grants for each month in 2005 and 2004, is available from the box above, right.