Taking Control of Equity Compensation Dilution

Stock-based compensation (SBC) has many benefits, but one of the tradeoffs is dilution to existing shareholders. The challenge is that dilution means different things to different stakeholders. Total Rewards designs the plan and sizes grants. Treasury implements buybacks. Accounting reports diluted EPS under ASC 260. Proxy advisors review burn rate. And investors often evaluate SBC expense as a percentage of revenue.  

The result? Every team can optimize its piece of the process while the company still ends up with a suboptimal dilution outcome. But dilution doesn’t need to be an immovable force. It’s something companies can calculate and control. 

This webcast is for teams and leaders who touch dilution in some way. Viewers will gain a better understanding of the different perspectives on dilution and learn how companies can align those perspectives to strategically manage SBC dilution rather than simply report it. 

Highlights include: 

• How different stakeholders measure dilution, and why focusing on one can have unintended consequences for others
• The pros and cons of a “zero net dilution” buyback policy, and how to implement a version that works for your needs
• Award design as a dilution lever: grant sizing in volatile markets, the use of performance awards and ESPPs, and strategies for adjusting eligibility as your company scales
• Best practices in diluted EPS forecasting and why traditional forecasting models break down

Join David Outlaw, Sri Vaidhiyanathan Uma, and Priya Salagundla for a practical discussion on managing SBC dilution. 

CPE Credits: 1.0 (available to live webcast attendees)
Field of Study: Specialized Knowledge
Program Level: Overview
Advance Preparation: none required
Prerequisites: none required
Additional CPE details