Community Corner

UBS Wealth Management Americas Introduces the UBS Equity Award Value Index

UBS Wealth Management Americas, a division of UBS AG, today introduced the UBS Equity Award Value IndexTM, a groundbreaking tool for measuring how employees perceive the value of their equity compensation. Increasingly, employees are looking at their compensation and benefits comprehensively, and the end of the year is a time for particular reflection. Equity plays a significant role in many compensation plans; therefore, understanding how participants perceive the value of those awards becomes critical to employers and employees.

The Value Index shows that 26% of participants perceive high or considerable value from their equity, with 43% perceiving minimal or no value. In addition, nearly half of all participants (47%) view their equity awards as a way to build wealth, while many (36%) view them as a paycheck supplement, and a significant portion (17%) view them as a “lottery ticket”.

“The UBS Equity Award Value Index has the potential to be a compensation and benefits game changer, because it sets a benchmark for measuring perceived value,” said Michael Barry, head of UBS Equity Plan Advisory Services. “Only 26% of participants from a cross-section of industries and service providers highly value their awards. There’s clearly a lot of runway for our industry to show employees that equity compensation is an important way to build wealth.”

The Index is based on data from a national survey of nearly 600 equity plan participants from a cross-section of companies, industries and service providers.

Understanding the perceived value of equity comp

In 2012, companies in the Russell 3000 Index granted their most valued employees equity awards worth more than $110 billion. Companies often grant these awards to attract and retain the best talent available. However, until now there has been no reliable market-wide index to help determine if the equity awards were having the desired effect on employees.

“Do employees truly value their equity awards? Do equity awards help attract and retain top talent? These are common, industry-wide questions. Now, this index helps answer these questions,” said Barry.

To develop the Equity Award Value Index UBS gathered data around five key perceptions: how much value employees assign equity awards; the award’s importance in either staying at a current job or accepting a new one; equity’s role in accumulating wealth or savings; and whether employees’ long term financial plans consider a role for equity awards.

The index was launched as part of the UBS Participant Voice, a semi-annual survey designed to generate insights about employees’ attitudes and behaviors toward equity compensation awards.

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