Drilling down deeper into the data reveals specific strategies for equity awards. There are four categories: No Equity Retainer & No Equity Upon Joining, No Equity Retailer But Equity Upon Joining, Equity Retainer But No Equity Upon Joining and Equity Retainer & Equity Upon Joining. (See Figure 7.1) The differences between Canadian and U.S. companies is quite staggering.
47% of Canadian companies participating in the survey report offering no equity retainer, but equity to board members when they join the company. That compares to only 32% of U.S. companies. 24 percent of Canadian companies reported offering no equity retainer and no equity upon joining. That figure is far different at U.S. companies. Thirty-seven percent of U.S. companies reported offering no equity retainer and no equity upon joining, a 13-point discrepancy.
A mere four-point discrepancy was found between Canadian and U.S. companies in the Equity Retainer & Equity Upon Joining category. 24 percent of Canadian companies reported offering both forms of remuneration, while a slightly higher percentage of U.S. companies (28) said they offer both an equity retainer and equity upon joining the board. Finally, only small percentages – 5% of Canadian companies and 3% of U.S. companies – reported offering an equity retainer but no equity upon joining.
In the Silicon Valley sample, the board index indicated that 76% of the Silicon Valley 100 offer initial options (equity upon joining), and 91% offer annual options (retainer options).
Here again, Canadian companies are much more generous then their U.S. counterparts: significantly less offer no equity, significantly more offer a retainer upon joining. U.S. and Canadian companies are similar in the retainer-only equity and in the joining/ retainer equity compensation.
Figure 7.1: Board Member Equity Remuneration - Canadian vs. U.S. Companies