Equity Award Modifications in the Real World

Enormous effort is put into crafting long-term incentive plans that motivate, retain, and reward employees. No matter how much care is put into the design and execution, situations change. Technological disruptions, world events, or business-specific pivots can cause equity awards to lose their original luster. It’s in these moments that modifications take shape.

Interestingly, the most difficult question is often whether a modification has even occurred. ASC 718 provides a detailed framework, but significant gray areas exist. For example, how do we interpret adjustments to performance targets that are made based on discretion available to the board of directors? In this webcast, we’ll spend time:

• Reconciling the textbook definition of a modification with what happens in the real world
• Reviewing the economic theory and accounting principles underpinning ASC 718
• Unpacking the different types of modifications and the unique treatment for each
• Discussing why special care is required when valuing modified awards
• Sharing best practices for managing modifications in stock administration and accounting systems
• Clarifying the footnote and proxy disclosure requirements for various modifications

Join us to get a breakdown of the most common modifications in practice, along with insights to help you navigate the complexities in ASC 718 and Regulation S-K. By the end, you’ll be an invaluable resource when the next modification comes up in your organization.

CPE Credits: 1.0 (available to live webcast attendees)
Field of Study: Accounting
Program Level: Overview
Additional CPE details