The Changing Face of Executive Compensation in IPO Companies
As part of the introduction to the IPO Pay Reporter™, our improved market-leading IPO compensation data services, we have conducted quite a bit of analysis on trends in executive compensation at companies that have recently gone public. What caught our attention the most was the significant reduction in ownership levels for founder CEOs of IPO companies. Ownership at IPO has been trending down for a number of years, but only in the last few years we've seen the fall off become significant.
While some would point to a small sample size, this argument is really only relevant for 2008 when 16 companies had initial public offerings. In reality the continuous drop in ownership has come over several years when an average of 100 companies per year made an initial public offering. Granted, this is nothing like the 1990s, but this is the reality of the first decade of the 21st century. Fewer companies are going out, and those that do have fundamentally changed from what we were used to seeing in the 1990s.
