With almost 20 years of employee stock option valuation experience, Equity Methods delivers clean, auditable fair values using plain English explanations. Our analysis is performed in a data-intensive programming environment—not Excel—to work with an unlimited number of records, automate calculations, and reduce risk. Our work is even covered by a SOC-1 report so that you and your auditors can be comfortable with the process.
We can help you in the following areas:
- Implement stock option valuation best practices that are robust to your specific circumstances, using the Black-Scholes formula, custom lattice models, or Monte Carlo simulations
- Use a marketplace participant framework to develop the expected term assumption: exclude non-representative historical data and control for unique events, changing granting patterns, and employee behavior
- Evaluate different volatility estimation methods, including historical volatility, implied volatility, and peer firm volatility
- For private and newly public companies, determine appropriate ASC 718 volatility peer lists and compute leverage-adjusted volatilities in accordance with current industry best practices
- Determine fair value discounts for post-vesting restrictions using industry-accepted and audit-friendly models
- Perform mark-to-market valuations for liability awards (including cash-settled SARs) or nonemployee awards, using methods that are internally consistent with your other valuations and appropriate for the unique circumstances of these awards
- Determine fair value estimates for RSUs that are not dividend-protected, using valid techniques to model the value of dividends that will be foregone during vesting
- Customize models and inputs for your unique circumstances, including phantom shares, dollar-denominated awards, custom payoff functions, and dividend equivalent rights
- Perform valuations under IFRS 2, meeting the unique challenges of tranche-level calculations
Realize greater control, repeatability, and auditability of results by working with a seasoned valuation practice that has strong relationships with all major public accounting firms.