Equity Awards in a Spinoff: Don’t Forget About the Data
Although corporate spinoff transactions have become a popular way of releasing shareholder value, they give rise to game-changing implications for the long-term incentive program. They also usually occur rapidly and in a context of limited information where different functional silos are trying to solve different problems.
In this issue brief, we discuss some of the ways in which long-term incentive awards are handled during a spinout transaction, the financial reporting implications to both the pre- and post-spin entities, and best practices for making sure equity data conversions are managed in ways that avoid downstream problems for both accounting and compensation purposes.
Our view is that while the accounting tail should never wag the strategy dog, accounting and compensation do need to be in close contact. Download this issue brief for a review of best practices with regard to adjusting and converting data during a spin-out.
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