WASHINGTON, Dec. 14 (UPI) -- U.S. chief executive officers and employees saw the value of their stock option awards decline by more than 40 percent between 2001 and 2003.
The Watson Wyatt's 2004-2005 Executive Pay Study, conducted by Watson Wyatt Worldwide, found the decline was softened for many chief executive officers, who benefited from an increase in the value of restricted stock and long-term incentive awards that most employees typically don't have access.
"The major challenge is for companies to develop new ways to motivate and reward executives and employees -- especially for the majority of employees who aren't eligible for restricted stock and other long-term incentive plans," said Ira Kay, national director of compensation consulting at Watson Wyatt.
The study of the 1,000 of the largest U.S. companies found that the average value of stock options for non-executive employees dropped 51 percent, from $4,196 per employee in 2001 to $2,037 per employee in 2003, while CEOs stock option awards decline 41 percent, from $3.4 million in 2001 to $2 million in 2003.
