Equity Incentive Analytics

Gradient’s Equity Incentive Analytics (EIA) provide early indications of future stock returns by relying on proprietary research and academic evidence that demonstrates a relationship between stock performance and equity compensation factors.  Areas analyzed include:

  • The timing and magnitude of option exercise and sale decisions
  • Whether or not executives at a given firm have a history of well-timed trades
  • The use of hedging instruments
  • The nature of sales made under 10b5-1 trading plans

Analysts also investigate the compensation committee and related governance issues. We believe that a company's procedures and controls (e.g., decisions about grant timing and accounting treatment) help to determine whether equity incentives are effective at aligning the interest of shareholders and recipients, or are merely motivating executives to control the timing of financial and other information to maximize their personal wealth.

EIA research manifest in a series of company-specific Alerts, Snapshots, and Notes.

Research Alerts: EIA Research Alerts announce the initiation of coverage of a particular company. Each Alert contains a grade (using an A to F scale) that considers equity incentives and fundamental- and valuation-based signals in formulating an overall positive or negative view about the company’s future stock returns. Sample Research Alert
Snapshots:: EIA Snapshots leverage the signals generated by our proprietary screens and models that our analysts use to determine Equity Incentive metrics of interest. Ratings of Positive, Neutral or Negative are assigned to summarize our perspective of noteworthy EIA metrics. Download sample EIA Snapshot
Research Notes: EIA Research Notes provide updates on previous coverage and are generally published after earnings announcements, financial statement filings, or other noteworthy events.

All EIA research is delivered via email or can be retrieved via the website. Clients can also explore our database of company-specific reports, use an array of web screening features, and set preferences for notification of any updates on any company in their portfolio.