Chart demonstrating that small companies are far more likely than large ones to offer employees stock options.
Small companies are far more likely than large ones to offer employees a chance to accumulate stock, according to a survey by Ernst & Young. At small organizations, explains Laura Sejen, a senior manager at Ernst & Young, "cash flow is more of a concern, so there's less emphasis on cash incentive plans and more on equity participation." Incentive stock options are the most favored plan among all sizes of organizations.
Percentage of companies participating in each kind of plan, by 1990 sales size
Less than $5 million- $25 million-
$1 million $10 million $50 million
Incentive stock 21.7% 12.5% 10.0%
Other 12.5 7.2 2.8
Nonqualified stock 11.4 7.3 6.3
Performance shares 6.7 1.8 1.1
Restricted stock 5.8 4.4 3.7
Stock-appreciation 2.8 1.9 0.0
Book-value plan 0.8 2.5 0.0
Phantom stock 0.8 1.2 0.7
Source: Ernst & Young's 1992 Executive Compensation Middle Market Survey of companies with annual sales of less than $50 million, New York City.