Pay vs. Performance Valuation

The SEC released the final rule on the long-awaited pay versus performance disclosure required under Section 953(a) of Dodd-Frank.

Among other things, Item 402(v) requires companies to produce a new proxy table showing interim fair value measurements on all outstanding unvested and in-period vesting awards. (This will be most complex for market condition awards and stock options.) Companies will need to track year-over-year fair value changes, compensation amounts across potentially changing groups of named executive officers, total shareholder returns (TSRs) across potentially changing peer groups, and more.

We can help you calculate the fair value of all outstanding unvested and in-period vesting awards.

How We Help

We do the following to help you prepare for the requirement:

  • Perform interim fair value measurements for all equity awards, including options, TSR-based awards, and other performance equity, taking into account the specific timing and terms of each
  • Automate the ongoing fair value measurement and TSR calculations
  • Develop multiple renditions using graphical, narrative, and combination approaches of the “clear description” required of CAP to company TSR, net income, and the CSM, as well as between company TSR and peer TSR
  • Collaborate with you to develop additional analytics either for internal analysis purposes or supplemental disclosure