Rutgers launches first-in-nation effort to study equity compensation

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Rutgers University said it is launching the Shares Laboratory, the nation’s first academic research initiative dedicated to stock equity compensation.

The effort, run by the Rutgers Institute for the Study of Employee Ownership and Profit Sharing, will conduct research and policy analysis on company stock, stock options, employee stock purchase plans, and other shares in the workplace.

In an April 18 press release announcing the initiative, the Institute said the impetus behind the effort comes from about a quarter of all private sector employees – some 26.3 million Americans – holding company stock or stock options as part of their compensation package.

The Lab plans to advance understanding of shares in five ways:

• Monitoring the growth of equity compensation and its role in the economy
• Analyzing federal policies relating to stock, stock options and other shares
• Conducting scholarly research on equity compensation in all its forms
• Proposing path-breaking innovations to extend shares to more employees
• Predicting how changes in equity access will affect different parts of the economy

The Institute says the Shares Lab will serve as its flagship “big data” program, monitoring government databases, public records and private surveys in addition to creating reports that will be disseminated by the Aspect Institute’s Economic Opportunities Program, the Employee Ownership Foundation, the Global Equity Organization, and the National Center for Employee Ownership.

Organizers believe these reports will become the gold standard for basic research on equity compensation.

Early supporters of the effort include Bank of America, Computershare, Fidelity Investments and PayPal, while Google.org provided a major donation to support the collection of 2022 data.

“A huge number of Americans receive equity compensation,” said Bill Castellano, a professor in the Rutgers School of Management and Labor Relations and co-leader of the Shares Laboratory. “There are many individual studies on its impact, but there’s never been a dedicated research program until now. The Shares Lab gives equity compensation an address – a place in higher education where policy, practice, and impact will be closely monitored.”

The Shares Lab has also created a model of the nation’s economy that breaks down the labor force by industry, workplace practices, equity access, income, wealth, and personal characteristics, which will enable researchers to conduct experiments on critical questions.

“We know there are gender and racial gaps in equity compensation,” said Douglas Kruse, a distinguished professor in the Rutgers School of Management and Labor Relations and co-leader of the Shares Laboratory, who also served as a senior economist at the White House Council of Economic Advisers under President Barack Obama. “By using the mode, we hope to learn which policy changes would extend shares to more women and people of color. We also hope to investigate how equity shares affect middle class incomes and wealth among other key questions.”

Joo Hun Han, a research fellow in the Rutgers Institute for the Study of Employee Ownership and Profit Sharing and co-leader of the Shares Laboratory, says the effort will provide the most objective analysis of equity compensation trends, which will identify problems and opportunities in the field.

“By engaging with practitioners, we hope to accelerate the impact of our research and propose innovations in equity compensation,” he said.