Press Release - April 04, 2005
LAFAYETTE, Calif., April 4 /PRNewswire/ -- Private companies successfully compete for highly desired executive talent by offering more stock compensation than their public company counterparts.
Syzygy Consulting Group has found that private technology companies are increasing stock compensation for executives and employees. Meanwhile public companies are pulling back stock awards in preparation for the Financial Accounting Standards Board requirement to begin expensing stock options this summer, a requirement that most private companies are less worried about.
“Clearly public companies are scaling back stock compensation practices,” said David Broman, Syzygy’s CEO. “Several of our public clients are decreasing future grants and even accelerating the vesting of existing grants just to avoid expensing their legacy stock compensation.”
But shareholders beware: “Some overreactions by public companies to the new expensing requirements are opening a window for private companies to recruit key talent,” noted Broman.
Syzygy’s private clients are leveraging stock compensation, even offering outright stock grants, to secure a competitive advantage in the executive labor market. “Private companies focus more on cash flow and cash runway as an indicator of financial health, so using stock compensation to steal talent makes good business sense,” observed Broman.
There are valuable lessons from private companies on how to best pay employees, ranging from the reasonableness of CEO pay, fairness of executive compensation and the most effective use of stock versus cash compensation.
In fact, Syzygy is now seeking private companies to participate in its 2005 annual compensation survey in order to provide quality data on how these companies attract and retain key talent. “It’s a unique survey,” said Broman, “and an excellent source to help private technology companies set a high and reasonable standard for executive compensation and to better link employee pay and benefits to overall business strategy.”
Conducted since 1999, Syzygy’s annual Pre-IPO and Private Company Total Compensation Survey is the only executive and employee compensation survey conducted in association with leading law firms, including Cooley Godward, Fenwick & West, DLA Piper Rudnick Gray Cary, Greenberg Traurig, Heller Ehrman, Latham & Watkins, Pillsbury Winthrop and Simpson Thatcher & Bartlett.
The survey reports upon cash compensation, stock/stock option grants, stock plan design and benefit programs, with specific total compensation data on Boards of Directors, the Chairman position, CEOs and other executives, plus over 5,000 employees in 33 benchmark jobs throughout five technology industries.
Private technology companies can visit www.syzygyconsulting.com or contact a Syzygy compensation consultant at 925-284-3669 to participate and request updated survey results.
About Syzygy Consulting Group
Syzygy Consulting Group, established experts in high technology compensation practices, serves clients ranging from small private companies to the largest multinational corporations. Syzygy’s customized human resources consulting and compensation design services help clients define and implement Board of Director compensation, establish fair compensation for the Chairman of the Board and CEO, link executive compensation to performance and develop other employee compensation and benefits programs. Syzygy is a registered trademark of Syzygy Consulting Group.
Contact: Brandon Butler
925-284-3669
925-284-0858 Fax
info@syzgyconsulting.com
http://www.syzygyconsulting.com
