Archive for April, 2016

Post Vest Holding Periods: No Consensus on the Impact on Grant-Date Fair Value

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Our previous two blog posts have addressed the inclusion of post-vest holding period restrictions in share-based payment awards. We are beginning to see such provisions in the awards our clients submit to us for valuation. We have implemented a number of models for the valuation of such provisions as part of a share-based payment award, and are ready and able to apply these models whenever they are called for. In light of the somewhat vague comments made by an employee ...

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Estimation of Discount from Grant-Date Fair Value for Share-Based Awards with Post-Vest Holding Periods

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In our previous blog post, we discussed comments by the SEC regarding the application of discounts to the grant-date fair value of share-based awards which include post-vest holding periods. In accordance with ASC 718-10-30-10, we consider the effect of the post-vest holding period on the grant-date fair value and estimate a discount. The academic literature presents a number of different models for the estimation of the discount, which depends upon the volatility of the company’s shares and the length of ...

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SEC Comments on Grant-Date Fair Value Discount for Share-Based Awards with Post-Vest Holding Periods

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We have noted a recent trend in incentive compensation practice regarding the inclusion of a Post Vest Holding Period as a provision in new awards. Post-Vest Holding Periods (PVHPs) require that any shares acquired as the result of the exercise of an ESO or the vesting of a TSR must be held for a specified period of time before they can be sold. Such provisions may result in a decrease in the fair value of the award, and afford an ...

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