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Issue Brief

Executive Stock Ownership Guidelines

Executive stock ownership guidelines are gaining more attention as companies seek to align the interests of their executives with those of shareholders. This report, published by Equilar and featuring commentary from Equity Methods and others, examines trends and components of executive stock ownership guidelines employed by Fortune 100 companies.

Blog Post

CEO Pay Ratio: An Update from the Field

In this blog post, we report on our preliminary experience in developing CEO pay ratio calculations since the SEC’s release of the final rule in August 2015. We share some of the surprises we encountered, along with best practices as the FY 2017 go-live date approaches.

Blog Post

Three Objections to TSR Awards (and What You Can Do About Them)

Relative total shareholder return (TSR) awards are part of many long-term incentive programs. With their rapid rise in popularity have come growing murmurs that they don’t work. What are some ways to capture the benefits of a TSR award while mitigating its weaknesses?

Blog Post

How Accounting Standard Changes Affect Metric Setting

What happens when you finalize an award design, only to discover the metrics were based on generally accepted accounting principles (GAAP) that have changed?

Issue Brief

Compensation Moneyball, Part I: The Science Behind Today’s Executive Performance Targets

Today’s compensation committee expects better justification of performance-based grants. To formulate supportable targets and payouts, many organizations are turning to a new technique called “distribution fitting.”

Issue Brief

Calculating Total Shareholder Return

Calculation of total shareholder return (TSR) seems fairly straightforward. But many have discovered otherwise, thanks to grant agreements that are full of unique features or fail to spell out the calculation method in adequate detail.

Issue Brief

A Crash Course on Earnouts

Earnouts are important to many M&A deals because they connect the consideration paid to the future performance of the acquired company. Learn what they are, how they work, and how their valuation implications affect upfront and ongoing accounting.

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What Is a Stock Warrant?

Stock warrants are an attractive vehicle for sales incentives, corporate control transactions, and lending transactions. But watch out: Determining fair value can be tricky.

Blog Post

The Importance of Lingering Volatility for Option Valuation

Historical volatility can be a factor in determining the fair value of employee stock options. Volatility was sky-high during the 2007-10 recession; today, not so much. Is now a good time to grant more options?

Issue Brief

How Many is Enough? Sample Selection and CEO Pay Ratio Accuracy

An emerging hot topic regarding the new CEO pay ratio rule is whether using statistical sampling to identify the median employee can simplify the process or trigger additional complexity. This Issue Brief explains why sampling may prove to be more trouble than it’s worth.