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 June 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.

Sanger

Smith

The largest stock option grant in June went to Stephen Sanger, chairman and chief executive officer of cereal giant General Mills. On June 26, Sanger was granted 468,750 options with a face value of more than $24 million, based on the grant date exercise price of $51.26. (General Mills Chief Operating Officer Kendall Powell ranked 10th in June, receiving 156,250 options with a face value of $8 million.)

Close behind Sanger was Fred Smith, chairman and CEO of FedEx; he snared 200,000 options on June 1 with a face value of $22 million, based on an exercise price of $110.06.

The largest stock award in June 2006 went to Sandeep Chennakeshu, general manager of microchip maker Freescale Semiconductor. On June 5, Chennakeshu received 250,000 shares (as restricted stock units) with a face value of nearly $7.5 million, based on the grant date stock price of $29.99. Ranked second was William Bradford, head of global sales for Freescale; he received 150,000 shares on the same day at the same price, for a total face value of $4.5 million. Freescale just announced a major advance in microchip design, using magentic forces to improve memory capacity.

A downloadable spreadsheet of the “top 10” option grants and stock awards from June 2006 can be found in the box at right.

According to Equilar, the grants and awards made in June continue a number of trends identified in prior months. Among the trends: Companies continue to shorten option term lengths, and to issue performance-based options and stock. Examples of each trend can be found below:

Shortened Option Term Length

The following companies granted options with a term of 10 years in the previous fiscal year, but in June granted options with a shortened term length:

On June 1, Network Appliance granted options to six executives with a term of seven years.

On June 12, BMC Software granted options to nine executives with a term of six years.

Performance-Based Options

On June 23, the Apollo Group granted options to 11 executives. The vesting contained the following performance-accelerated criteria:

“25 percent of the shares covered by this option shall vest on the following dates: February 28, 2007, February 29, 2008, February 28, 2009, and February 28, 2010. The vesting shall accelerate if certain operational goals are achieved.”

On June 26, HealthMarkets granted options to four executives. The exercise price of the options will increase over time, making their value dependent on increases in the company’s stock price as follows:

“The initial exercise price of the option is $37. The exercise price of the option will accrete by 10 percent per year, starting on June 26, 2008. If the optionee exercises the option prior to June 26, 2008, the exercise price will be $37. If the optionee exercises the option on or after June 26, 2008, but prior to June 26, 2009, the exercise price will be $40.70. If the optionee exercises the option [on] or after June 26, 2009, but prior to June 26, 2010, the exercise price will be $44.77. If the optionee exercises the option on or after June 26, 2010, but prior to June 26, 2011, the exercise price will be $49.25. If the optionee exercises the option on or after June 26, 2011, the exercise price will be $54.17.”

Performance-Based Restricted Stock/Restricted Stock Units

On June 15, FileNet Corp. granted restricted stock units to six executives with similar performance-contingent vesting criteria. The grant to the chairman and chief executive officer is as follows:

“The RSUs vest based upon achievement by the issuer of pre-established financial performance criteria as certified by the compensation committee. Vesting is conditioned upon the reporting persons continued employment through the last day of the performance period. A maximum of 90,000 RSUs may vest in fiscal 2007. To the extent the RSUs do not vest they are automatically forfeited. The underlying securities are issuable upon or following vesting or if elected by the reporting person upon the reporting person’s termination of service with the issuer.”

On June 26, Fleetwood Enterprises granted restricted stock units to 11 executives with the following performance-contingent vesting criteria:

“The restricted stock units vest, subject to the satisfaction of performance criteria, one year after grant, in three annual installments beginning June 26, 2008.”

A downloadable spreadsheet of the “top 10” equity awards in June 2006 can be found in the box above right. The spreadsheet includes data from the first five months of the year, as well. Also available are data from 2004 and 2005.

For related coverage, please select “Executive Compensation” or “Stock Option Expensing” in the left-hand column of any page on the Compliance Week Web site.