Burn Rate Disclosures for Equity Awards - Proxy Statement

OmniCare (short form):

  • Our three-year average burn rate is approximately 1.26% when calculated by dividing the total number of equity granted in any given year (adjusted for volatility of our Common Stock) by the weighted average diluted shares of Common Stock outstanding. The number of equity awards used in the burn rate calculation excludes shares underlying performance restricted stock units (which are counted in the year in which they are earned) but is not discounted for canceled or forfeited options or shares acquired or retained by us.

Goldman Sachs (2014)

Starbucks 2010 FAQS:

5.            How many shares has Starbucks historically granted each year under the Plan?
In both fiscal 2008 and fiscal 2010, Starbucks granted approximately 17-18 million shares* (including in the form of stock options, time-based RSUs and performance-based RSUs) under the Plan to approximately 95,000 partners. As with many companies, the economic downturn impacted our financial and stock performance in fiscal 2009. The stock option grant price for our annual equity award that year was a low $8.64, a stock price not seen in years, and as a result we granted approximately 35 million shares* under the Plan to approximately 90,000 partners.
*Shares granted does not reflect the impact of the fungible pool ratio of 2.1 on full value awards.

6.            What are your 1-year and 3-year average burn rates (shares granted under the Plan during the year divided by the weighted average common shares outstanding)?
Starbucks fiscal 2010 burn rate was 2.39%, or 1.20% net of forfeitures and our 3-year average annual burn rate for fiscal 2008 through fiscal 2010 was 3.17%, or 1.61% net of forfeitures, well below the Institutional Shareholder Services (“ISS”) burn rate threshold of 4.8% based on our GICS code.

7.            What do you anticipate your burn rate to be going forward?
We anticipate our burn rate to be between 2-3% per year and anticipate our burn rate net of forfeitures will continue to be between 1-2% per year.

8.            Are you looking to reduce the burn rate going forward?
We feel that we have managed the burn rate appropriately in the past and will continue to do so in the future. Burn rate is just one of several factors that Starbucks considers when determining equity award grants. However, we are well below ISS’ burn rate threshold of 4.8% based on our GICS code. We continually monitor our share usage and provide regular updates to the Compensation and Management Development Committee of the Board of Directors.