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Article | Executive Pay Memo North America

Stock ownership guidelines and retention requirements among the S&P 100

By LaToya Scott and Dan Leon | November 21, 2022

Company guidelines require higher levels of stock ownership for CEOs.
Governance Advisory Services |Executive Compensation

CEO stock ownership required under company stock ownership guidelines has increased slowly but surely over the past seven years. WTW’s Global Executive Compensation Analysis Team (GECAT) completed its most recent review of S&P 100 stock ownership guidelines and retention requirements, comparing 2022 practices with those in place during 2015. While significant changes to stock ownership guidelines do not typically occur year over year, they have made a definitive shift since 2015.

CEO salary multiples will likely be the main point of interest for ownership guidelines in years to come. Going above 6x salary for the CEO is becoming more common, but it is unclear whether this will turn into the majority practice. Linking stock retention requirements to ownership guidelines is also worth considering, as the overall increase in companies with retention requirements is largely attributed to guideline-dependent policies specifically. Guideline-dependent policies totaled 83% of retention requirements in 2022 compared with 73% in 2015 (a 14% increase), which is inclusive of companies that used both a guideline-dependent policy and a stand-alone policy together.

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Lead Associate, Global Executive Compensation and Analysis Team (Houston)

Senior Associate, Global Executive Compensation and Analysis Team (Houston)

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