How to Make Sense of Pay vs. Performance Data
PvP data can be leveraged to assess whether executive compensation exceeds the market and how it aligns to the return realized by shareholders over that same period. In this publication, we share what you need to know about using the SEC’s new pay vs. performance disclosure to inform decisions about executive pay. As published in…
Explaining Sharing Ratio as Defined from “Pay versus Performance”
The new executive compensation disclosures under Item 402(v) (“Pay versus Performance”) have created new standardized disclosures that are rich for advanced analytics. This brief will summarize the mathematics to define a “Sharing Ratio” based on these new standardized disclosures. As a quick reminder, some of the data items in the new disclosures are: The pay…
The SEC Pay versus Performance Rules: Is the Value in an ESPP Included in Compensation Actually Paid?
The SEC announced the adoption of its new pay versus performance rules, or Item 402(v) on August 25, 2022. A detailed summary of the new rules can be found within our Alert found here. However, the intent of this shorter brief is to highlight the treatment of Employee Stock Purchase Plans (ESPPs) within these disclosures.…
SEC Pay Versus Performance: When is the “Vesting Date”?
The SEC announced the adoption of its new pay versus performance rules, or Item 402(v) on August 25, 2022. A detailed summary of the new rules can be found within our Alert found here. As a reminder, the new rules require all outstanding and unvested awards to be re-valued as of the end of the…
SEC Pay Versus Performance: Mandatory Holds and the Effect on Compensation Actually Paid
The SEC announced the adoption of its new pay versus performance rules, or Item 402(v) on August 25, 2022. A detailed summary of the new rules can be found within our Alert found here. However, the intent of this shorter brief is to summarize the effect that a mandatory holding period after vesting has on…
SEC Pay Versus Performance: The Monthly Vesting Challenge
The SEC announced the adoption of its new pay for performance rules, or Item 402(v) on August 25, 2022, which requires several new executive compensation disclosures around employee equity. The new rules require all outstanding and unvested awards to be re-valued as of the end of the fiscal year and awards that vest during the…
SEC Pay Versus Performance: Stock Option Valuation Solutions (Part 1)
The SEC announced the adoption of its new pay for performance rules, or Item 402(v) on August 25, 2022. A detailed summary of the new rules can be found within our Alert found here. However, the intent of this shorter brief is to summarize the different approaches for the re-valuation of employee stock options as…
SEC Pay Versus Performance: Stock Option Valuation Solutions (Part 2)
The SEC announced the adoption of its new pay for performance rules, or Item 402(v) on August 25, 2022. A detailed summary of the new rules can be found within our Alert found here, or at www.SECPayVersusPerformance.com. As a reminder, the new rules require all outstanding and unvested awards to be re-valued as of the…
ESPP Share Limits and the Valuation Impact
Ignoring share limits can increase your compensation expense. In ESPP Valuation: 4 Missing Pieces, we highlighted several potential reductions to the valuation of an ESPP share under ASC718. In this brief, we will provide more granular detail on share limitations, specifically focused on: We will provide more specific detail on when the reduction may become…
What You Should Know About Rising Interest Rates and Your ESPP
As interest rates increase, companies should optimize ESPP valuation by reducing fair value for interest foregone. Most experts anticipate that the United States will continue to increase interest rates during 2022. Over the last 20 years, interest rates have been historically low. The picture below illustrates the last 40 years for the 6-Month Treasury Rates.…
