Insights

Performance Share Fundamentals

Meridian explains the key features of performance shares and other considerations companies should know about.

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Description Performance shares are performance-contingent pay denominated in common stock and earned over a performance period if certain performance goals are attained. Often, performance share plans provide for a payout matrix under which performance shares are paid at differing levels…

Restricted Stock Fundamentals

Meridian explains everything you need to know about the basics of restricted stock.

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Description Restricted stock is an award of employer stock that is subject to vesting requirements and transferability restrictions (generally at no cost to the employee). Key Features Dividend and Voting Rights Restricted shares typically have voting and dividend rights. Dividends…

Stock Appreciation Rights Fundamentals

Basics of stock appreciation rights and what companies should know about them.

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Description A stock appreciation right (SAR) entitles an employee to the appreciation in value of a specified number of shares of employer stock over an “exercise price” or “grant price” over a specified period of time. Key Features Base Price…

Performance Unit Fundamentals

Looking at performance units and how they operate in executive compensation plans.

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Description Performance units are performance-contingent pay denominated in dollars and earned over a performance period if certain performance goals are attained. Often, performance unit plans provide for a payout matrix under which performance units are earned at differing levels (e.g.,…

Restricted Stock Unit Fundamentals

Defining RSUs and explaining their place in executive compensation.

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Description Restricted stock units (RSUs) are an award of units that correspond in number and value to a specified number of shares of employer stock that typically are subject to vesting requirements and transferability restrictions. Units do not represent any…

Accounting for Executive Compensation

What companies should know about accounting for their executive compensation packages.

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The Basics The exchange of services for equity creates an accounting expense that must be recognized in the income statement. ASC Topic 718 (formerly SFAS 123R) is the rule that governs expensing of all stock-based compensation. The expense realized is…

Fundamentals of Long-Term Incentives

Pros and cons of the three most common categories of long-term incentives.

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Long-term incentives (“LTI”) are forms of variable (“at risk”) compensation based on the achievement of longer-term performance and objectives. Primary objectives are to: Align executive interests with shareholders and align executive pay with company performance and strategy. Balance annual incentives…