Abstract
Restricted stock is front-page news. Microsoft, considered a leader in employee compensation, recently announced that it is discontinuing the use of stock options and switching to restricted stock for 50,000 employees. Why have major companies switched to restricted stock for employee compensation? The answer is complex, but it is an outgrowth of market conditions, regulation and public anger directed at executive compensation in the midst of corporate scandals. This article provides an overview of restricted stock as an asset class and a framework for companies that are considering changing their employee and executive compensation plans to include restricted stock. As the trend toward restricted stock instead of stock options accelerates, all of the parties involved with this asset class will need to upgrade their systems and augment business processes with technology solutions to keep pace with volume and with shareholder expectations for swift and accurate service.
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