How to Incentivize Talent When Options Aren’t an Option

Challenge: Farient Advisors worked with this maturing technology company to design an innovative, performance-based, long-term incentive plan. Historically, the company’s long-term incentives focused almost exclusively on stock options, but over time, the effectiveness of this vehicle had decreased as the company’s volatility diminished.

Approach: Although the company supplemented options with time-based restricted stock, Farient helped it sharpen its performance orientation to address mounting pressure from investors to closely link pay to performance.

The Result: Farient collaborated with management and the compensation committee to develop a new long-term incentive plan that captured the motivational spirit of options while directly linking growth measures and relative shareholder return.