Valuation of Equity Awards and Complex Securities

When granting or measuring the impact of equity awards and complex securities, clients routinely turn to us to perform in-depth valuation analysis. Clients use our services to assist in the planning and design of equity awards, as well as tax and financial reporting compliance. Services include:

  • Pre-IPO stock option and common stock valuation
  • Pre-award planning
  • Valuation of profits interests
  • “Waterfall” analysis
  • Performance and time vesting awards (e.g., SARs, LTIPs, and RSUs)
  • Analysis of repricing and option exchange programs
  • Compensation versus consideration in the context of an acquisition
  • Assistance with client models

Our analytical and modeling depth and proprietary valuation models are tailored to our clients’ needs, using appropriate underlying modeling techniques like Black-Scholes Option Pricing, Binomial Lattice, and Monte Carlo Simulation.

Our understanding of best practices and the key issues of relevant regulators help our clients maximize the economics on any issuance and avoid audit review. We have an in-depth understanding of relevant standards and guidance, including IRC 409A, FASB ASC Topic 718, IFRS 2, and the AICPA Practice Aid.

Dedicated industry groups within our organization apply sector-specific expertise to our valuation analyses. As a result, we take a “real-world” approach, with an effective mechanism for reconciling a theoretically determined fair value to an expected market price. We have been assisting clients with share-based compensation valuations for over 40 years.