Individual-based Plans
Individual-based plans provide managers with discretion to decide which individual employees or groups of employees should receive stock awards and in what amounts. These plans may be tailored to certain individuals or teams and may be linked with specific performance targets or years of service to incentivize targeted performance metrics. They function as a powerful retention tool when they have a vesting schedule that requires employees to stay with the company a certain number of years before they can realize the full value of the award. Another advantage to using these types of plans is that they provide great flexibility and are relatively inexpensive to implement.
These types of plans include:
 Stock Grants
Stock grants, often given as a form of incentive compensation, are one of the simplest and most flexible ways to provide employees a stake in their company.
 Direct Stock Purchase Programs
Direct stock purchase offers give employees the opportunity to purchase, out of their own funds, a stated number of shares of stock.
 Stock Option Plans
Stock options - the right to buy a stated number of shares of stock during a stated period of time at a stated price - are popular with companies of all sizes because of their flexibility and relatively low cost to create and administer.
 Non-qualified Deferred Compensation
Non-qualified deferred compensation plans are traditionally used to defer taxes and build wealth for key executives. These plans are quite flexible and can be used to meet tax planning and compensation objectives for specific employees.
 Stock Appreciation Rights (SARs)/Phantom Stock
Stock appreciation rights (SARs) and phantom stock are specialized compensation tools designed to provide employees with the economic benefits of stock ownership, although typically no actual transfer of stock occurs.
 Restricted Stock Units
Restricted stock units are a relatively new form of equity compensation. Generally, they are an agreement to issue stock at a future time once an employee satisfies a vesting schedule.
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