About National Center for Employee Ownership
New hire grants are what they sound like-grants made when an employee joins the company. As table 2-5 reports, 35% of these grants are worth less than 50% of the value of each ongoing grant, but many new hire grants are more valuable. Table 2-6 reports the overall results for new hire options.
When we looked at variation by industry, size, and region, – more... we found very few consistent patterns. Very small companies were more likely to make new hire grants that were a smaller percentage of ongoing grants than the national norm, with 77% of companies under 31 employees making new hire grants worth 100% or less of the value of ongoing grants, but size was an inconsistent predictor otherwise. Industry also made little difference, although e-commerce companies were about twice as likely as the national norm to make grants worth three times the value of ongoing grants. Southern and Midwestern companies were more likely to make smaller new hire grants than companies in other regions.
Eligibility for new hire grants followed similar patterns to ongoing grants, with almost every category paralleling national norms for who is eligible. Overall, 81% of hourly and 77% of international employees actually received new hire options, but Midwest companies granted to fewer hourly employees (63%) and international employees (50%), as did wholesalers and retailers (56% and 37%, respectively), and very large employers (32% and 52%). Southern (62%) and Northeastern (65%) companies were also more likely to exclude hourly employees. Differences for public and private companies for ongoing grants are mirrored here; the face value of grants is much smaller in private companies, but the number of options granted is much larger in private companies. There was little variation for other categories.
About half the companies use a formula to distribute new hire options to hourly employees, and slightly less (44%) use that approach for sales and technical employees. Patterns of variation here were inconsistent, except for Southern companies, less than a quarter of whom use a formula for these groups, and wholesale/retail employers, who are about one-third more likely to use a formula approach. Discretionary awards account for the other options granted, and mirror the variations reported for formula approaches. – less – More from ZoomInfo »
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