Those grants usually are outright gifts of company stock not tied to company performance. Again, read the fine print. If performance lagged, check whether the board is using stock options to encourage growth, while holding the line on salaries and bonuses. Options that can be cashed in when the company's stock reaches a much higher price are a good incentive for executives to push shareholder value. See who sits on the committee.
Red flags go up if the chief executive or any other full-time employee is a member.
10 Revised SEC guidelines require most public companies to publish a performance graph comparing total shareholder return to a self-selected total peer group of similar companies and a national market index. The chart will show whether the company is outperforming or underperforming the market.