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, 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 September 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.

Chambers

The largest stock option grant in September went to John Chambers, president and chief executive officer of electronics manufacturing giant Cisco Systems. On Sept. 21, Chambers was granted 1.3 million options with a face value of $29.9 million, based on the grant date exercise price of $23.01. Right behind him was his rival Edgar Masri, chief executive officer of 3Com Corp.; Masri received a grant on Sept. 5 of 6 million options with a face value of $26.7 million, based on a grant date exercise price of $4.45. Two weeks later, 3Com reported revenues up 69 percent but still had a net loss of 4 cents per share.

Mark

The largest stock award last month went to Reuben Mark, chairman and chief executive officer of Colgate-Palmolive. On Sept. 7, Mark received 164,799 shares with a face value of $10 million, based on the grant date stock price of $60.68. Again, a friendly rival placed second: James Kilts, former CEO of Gillette and now vice chairman of Proctor & Gamble. Kilts received 150,000 shares on Sept. 29 with a face value of $9.29 million, based on the grant date stock price of $61.98.

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

According to Equilar, the grants and awards made in September 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 some of these trends can be found below:

Premium-Priced Options

On Sept. 5, 3Com Corp. made four grants of options to its president and its chief executive officer, two of which were premium-priced. One of the grants has an exercise price 20 percent higher than the company’s closing stock price of $4.45 on that date. A second grant has an exercise price 30 percent higher than the company’s closing stock price on the date of grant.

Performance-Based Options

On Sept. 12, Datascope Corp. granted options to its vice president and a divisional president with the following performance-accelerated vesting criteria:

“The option vests in four equal installments on each of the first four anniversaries of the grant date. However, prior to the fifth anniversary of the grant date, the vested portion of the option is exercisable only if the average of the high and low sale prices of the issuer’s common stock as quoted on the NASDAQ Stock Market on the trading day immediately preceding the exercise date is equal to or greater than $38. After the fifth anniversary of the grant date, the option is fully exercisable, without any regard to the issuer’s common stock.”

Performance-Based Restricted Stock/Restricted Stock Units

On Sept. 8, Stein Mart granted restricted stock to two executive vice presidents with the following performance-contingent vesting criteria:

“Granted pursuant to Stein Mart 2001 Omnibus Plan. The shares will be issued when performance conditions tied to the market price of the company’s common stock are met on or before the fourth annual anniversary of the grant date, or Sept. 22, 2010.”

On Sept. 18, McDonalds Corp. granted restricted stock units to its president and chief operating officer with the following performance-based vesting criteria:

“Restricted stock units are granted under the company’s Amended and Restated 2001 Omnibus Stock Ownership Plan and are subject to the terms of such plan. Upon vesting, payout under the RSUs will be in the form of an equal number of shares of McDonald’s common stock or, at the discretion of the board’s compensation committee, the cash value thereof. No dividend, voting or other shareholder rights attach to the RSUs until they vest and only if the payout upon vesting is in shares of common stock. Performance based on diluted earnings per share growth.”

On Sept. 18, LifePoint Hospitals granted restricted stock to its president and chief executive officer with the following performance-contingent vesting criteria:

”These shares were granted to the reporting person as a restricted stock award under the LifePoint Hospitals Long-Term Incentive Plan. The shares become unrestricted on Sept. 18, 2009 subject to the achievement of specific predetermined performance criteria and if the reporting person remains employed by the issuer.”

A downloadable spreadsheet of the “top 10” equity awards in September 2006 can be found in the box above, right. The spreadsheet includes data from the first seven 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.