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 that are calculated by data provider Equilar by multiplying the number of shares in the grant by the market price per share on the grant date.

Latest Data

The spreadsheet below will include the “Top 10” lists for each month in 2009 as they become available.

View the Top Equity Awards Made in February

Prior Years’ Data

View Equity Awards From Each Month in 2008

View Equity Awards From Each Month in 2007

View Equity Awards From Each Month in 2006

View Equity Awards From Each Month in 2005

View Equity Awards From Each Month in 2004

Source: Equilar Inc.

The largest grant of stock options went to Muhtar Kent, CEO of Coca-Cola. Kent received a grant of nearly 1.17 million options on Feb. 19 with an exercise price of $43.20 each, implying a face value of more than $50.4 million. Coke’s arch-nemesis, Pepsico, also appeared on the list last month: CEO Indra Nooyi received a grant of 452,830 options on Feb. 6 with an exercise price of $53.00, implying a face value of almost $24 million.

Other companies doling out large option awards in February included Johnson & Johnson, Southern Corp., Aetna, and Nabors Industries.

The largest restricted stock award went to Robert Silberman, chairman and CEO of Strayer Education Corp. Silberman received a grant of 183,680 shares on Feb. 10 worth $40 million, based on a grant-date price of $217.77. Trailing behind him was Raymond Mcdonnell, COO of the company; he received 45,920 shares on the same day, worth a total of $10 million.

Apache Corp. had three executives on February’s list; other companies in the ranking included Vertex Pharmaceuticals, Microsoft, and MBIA.

A downloadable spreadsheet of those awards can be found in the box at right.

Trends, Performance

According to Equilar, several grants of “premium-priced” options were awarded in February, an increasingly common compensation practice. Awards are considered premium-priced when the exercise price of the grant is higher than the stock price on the grant date. Such awards are not well loved by executives, as the awards are immediately “underwater,” so the company’s stock price has to rise to the level of the exercise price for the award to have any value.

For example, on Feb. 2, Broadridge Financial Solutions granted 11 executives a pair of options with exercise prices 20 percent and 10 percent higher than the company’s closing stock price of $13.79. And on Feb. 23, UnitedHealth Group granted stock appreciation rights to eight executives with an exercise price 24.9 percent higher than the company’s closing stock price of $23.82.

The habit of doling out grants with shorter-term lengths also continued. Grants of shorter terms can reap some savings benefits when companies report their cost on financial statements and have been a common phenomenon since companies had to start expensing stock options in 2006.

On Feb. 5, the Cheesecake Factory granted options to five executives with a term length of eight years, where it had awarded options with terms of 10 years in 2007.

Pay for Performance

Equilar also noted that companies are continuing to issue performance-based options and restricted stock. On Feb. 15, JDS Uniphase granted options to three executives with the following performance-based criteria:

“The Performance Stock Options will vest in three equal installments on the latter to occur of (i) the first, second, and third anniversaries of the grant date and (ii) the appreciation of the price of the company’s common stock such that it will have traded at a minimum of a 25 percent premium to the exercise price of the Performance Options for 30 consecutive trading days.”

On Feb. 24, Regions Financial granted options to eight executives with the following performance-based criteria:

“The options vest in three equal annual installments beginning on Feb. 24, 2010, with vesting levels further conditioned on the attainment during the life of the options of common stock price targets ranging from 125 percent to 150 percent of the grant date price.”

And on Feb. 25, Community Health Systems granted restricted stock to seven executives with the following performance-based criteria:

“Each performance-based restricted share represents a contingent right to receive one share of CYH common stock. There are two elements to the lapsing of the restriction; first, the company must achieve specified targeted amount of earnings per share from continuing operations, or net revenue from continuing operations, and if the performance objective is met, the vesting restrictions will lapse in 1/3 increments on the first, second, and third anniversary of the date of grant. If the objectives are not met, the shares will be forfeited.”

A downloadable spreadsheet of the top equity awards in February can be found in the box above, right. Also available are data from 2004-2008.