1 The Glass Lewis Approach Examines plan exhaustively Probes economic costs relative to financial...
3
1 The Glass Lewis Approach Examines plan exhaustively Probes economic costs relative to financial performance Converts everything to a common “currency” so comparisons are valid Considers grant and cancel rates, not just absolute program size to determine annual cost Measures the program cost compared to the value of the business being operated Ensures continual involvement of shareholders Rebukes excessive past granting patterns
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Transcript of 1 The Glass Lewis Approach Examines plan exhaustively Probes economic costs relative to financial...
1
The Glass Lewis Approach
Examines plan exhaustively
Probes economic costs relative to financial performance
Converts everything to a common “currency” so comparisons are valid
Considers grant and cancel rates, not just absolute program size to determine annual cost
Measures the program cost compared to the value of the business being operated
Ensures continual involvement of shareholders
Rebukes excessive past granting patterns
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Methodology Overview
Program Size Analyses
Program Features Analyses
Numerical Score
Program Cost Analyses Pass/Fail
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Program Cost Estimated Total Annual Cost
Annual expected options grant
(weighted average of 3-year historical grant data) XCost per option
(Merton)=
Estimated option cost
Annual expected grant of other equity awards
(weighted average of 3-year historical grant data)X
Cost per share
(Market)=
Estimated other equity award cost
Estimated Total Annual CostEstimated option cost
Estimated other equity award cost
+ =
