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UBS Wealth Management Americas introduces the UBS Equity Award Value Index™

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Equity comp: Lottery ticket, paycheck supplement or wealth builder?

New York, NY December 9, 2013 –UBS Wealth Management Americas, a division of UBS AG, today introduced the UBS Equity Award Value Index™, 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 towards equity compensation awards.

Importance of equity compared to other benefits

When comparing equity awards to other forms of compensation, more experienced participants view equity compensation as rivaling the importance of their base salary in terms of helping them accumulate wealth. Whereas moderately experienced participants view equity compensation on a par with cash bonuses. Participants who have vested fewer than three times find equity awards to be the least valuable form of compensation for wealth accumulation.  For all participants, base salary and healthcare benefits were the two most critical factors in taking or staying at a job.

"Experience with equity awards drives participants' perception of their value," said Emily Pachuta, Head of Investor Insights, UBS Wealth Management Americas.  "Employees now look at their compensation and benefits as a total package.  We do expect healthcare benefits to remain a significant factor in employee acquisition and retention, given an aging population and Baby Boomers' desire to keep working.  However, equity compensation is a very important benefit for employees, particularly when it comes to building wealth."

Differences in investor confidence and financial concerns

Participants with three to five vesting experiences are the most engaged with their awards from the day they receive their grant up to one month prior to vesting.  This group is frequently checking the stock price (49%) and planning for what to do on vesting day: setting a mental sell price (44%), modeling the potential value of the award (39%), and thinking about what to do with the proceeds (35%).  Once shares have vested or options are in the money, those with six or more vesting experiences are more likely to take action when the stock is at their mental sell price.  Those participants with fewer than three vesting experiences are significantly more likely to be unsure of their plans post-vesting.

According to the study those with up to two vesting experiences are more likely to: focus on avoiding losses (71%), be least prepared in terms of retirement planning (45% highly prepared), and be less confident about achieving their financial goals. Those with three to five vesting experiences are more likely to: worry about the economy and the markets affecting their compensation, feel the most momentum with their financial situation (improved from last year and expect to improve in the next year), and be less optimistic about short-term (next 12 months) outlook on the U.S. economy. Participants with six or more vesting experiences are more likely to: be most prepared in terms of retirement planning (55% highly prepared), worry about missing out on market gains (42%), and hold a VP-level or above position at their company.  

UBS Equity Plan Advisory Services currently serves more than 130 companies representing more than one million participants in over 150 countries, delivering customized solutions and providing access to advice to all plan participants. UBS Equity Plan Advisory Services provides both partial and full plan administrative services, offering customized plan administration based on specific company needs.

In the past four years, UBS has invested nearly $200 million to bring clients cutting-edge technology and industry expertise. UBS Equity Plan Advisory Services earned the highest rating for partial and a top rating for full administration services, the only firm to be so highly rated in both categories, in the Group Five 2013 Stock Plan Administration Satisfaction Study.

We invite you read the full report here:


The survey was fielded from September 24 – 30, 2013. It was an online, blind survey conducted of investors and clients using an external vendor (Research Now). 579 plan participants, who currently receive equity compensation from their company, completed the survey.

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Notes for Editors

About UBS Wealth Management Americas

UBS Wealth Management Americas provides advice-based relationships through financial advisors who deliver a fully integrated set of products and services specifically designed to address the needs of ultra-high net worth, high net worth and core affluent individuals and families. It includes the Wealth Management U.S. business, the domestic Canadian business and the international business booked in the United States.

About UBS

UBS AG and its subsidiaries draw on a 150-year heritage to serve private, institutional and corporate clients worldwide, as well as retail clients in Switzerland. Its business strategy is centered on its pre-eminent global wealth management businesses and its universal bank in Switzerland. Together with a client-focused Investment Bank and a strong, well-diversified Global Asset Management business, UBS will drive further growth and expand its premier wealth management franchise. 

UBS is present in all major financial centers worldwide. It has offices in 57 countries, with about 35% of its employees working in the Americas, 36% in Switzerland, 17% in the rest of Europe, the Middle East and Africa and 12% in Asia Pacific. UBS employs about 62,000 people around the world. Its shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).