Thursday, 29 July 2010 15:41

Canadian Boards Report - Board Member Equity Remuneration Featured

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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

Board Member Equity Remuneration - Canadian vs. US Companies

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Dora Vell

Dora Vell is the Managing Partner of Vell Executive Search, a boutique executive search firm in Boston focused on recruiting technology executives and board members. Vell has successfully completed numerous board member and C-level executive searches, including CEOs, COOs, CIOs, and Vice Presidents - at both public and private companies.

Prior to founding the firm in 2005, Vell was a Partner at Heidrick & Struggles' Technology practice for seven years.  Before her career in executive search, she worked at IBM for 11 years, managing software engineering organizations of 100 people and software sales organizations with revenues of $150 million. She has also served as an executive assistant to the CEO of IBM Canada for one year.

Vell holds seven worldwide software patents. She has published several Business of Leadership reports on governance and leadership and has been quoted in numerous articles including The Wall Street Journal, Forbes, Business Week, Fortune, Agenda Week, MSNBC, Mass High Tech, the OPUS for the World Economic Forum, Boston Business Journal, The Globe & Mail, CIO Magazine, and IEEE. She also has been a featured speaker on leadership at numerous conferences and at Columbia University's MBA program.

Vell is a member of the National Association of Corporate Directors (NACD), the Boston CEO Roundtable. She has served on the boards of Framingham State, Entrepreneur's Organization, Goodwill, Mary Centre for developmentally handicapped adults,, and RBC Capital Partners.

She has received an MBA from the University of Toronto, a Master in Computer Science from the University of Waterloo, and a Bachelor in Computer Science from Carleton. She has also completed the MIT Entrepreneurial Master’s program.

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