Stock Options

Stock Option Valuations for Private and Newly Public Companies

Private and newly public companies face unique challenges under ASC 718. You’re held to the same rigorous standard for valuation assumptions as established blue-chips, but you don’t have the stock price or option exercise history to lean on. This causes major headaches for companies issuing equity awards for the first time, as well as for companies that are already public but wondering when and how to transition from a simplified expected term and peer volatility.

Services

Equity Methods can help. Our services include the following:

  • Perform valuations of equity compensation instruments, complex securities issued in financing transactions, and the value of the common equity itself for 409A purposes
  • Develop ASC 718-compliant peer lists and compute leverage-adjusted volatility assumptions in line with current industry practices and auditor expectations
  • Update valuation assumptions as newly public companies mature, including transitioning away from peer volatility and the SEC Simplified Method for estimating expected term
  • Determine expected term in cases where the SEC Simplified Method is not appropriate, including analysis of pre-IPO equity granting data
  • Identify ways to improve LTIP award and program designs to drive better incentives and minimize your administration or compliance burden

Take advantage of experience that goes beyond valuation to enable a strategic understanding and long-term plan for your equity compensation.

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Meet Our Experts

Nathan O’Connor

Managing Director

David Outlaw, CEP

Managing Director, Valuation & HR Advisory Services

Josh Schaeffer, PhD

Managing Director, Valuation & HR Advisory Services

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