TheCorporateCounsel.net

Over the past month or so, I have done a lot of speaking about the SEC’s new pay versus performance rules (including our excellent program on CompensationStandards.com last week), and one consistent practice pointer has been to line up your outside valuation service providers now.

Just as everyone seems to be doing their holiday shopping early this year, folks dealing with the pay versus performance rules have been rushing out to engage with outside valuation firms for the purpose of valuing equity awards to compute “compensation actually paid.” Outside valuation firms may be necessary for this purpose because your equity awards may require complex valuation approaches that require significant computer firepower and particular expertise, so it may not be possible for your in-house financial reporting and accounting groups to do the work on their own.

But we have a scarcity problem here, because there are only so many firms that do this sort of valuation work, and there are only so many hours in the day in which they can run their models, so it is important to claim your spot in the queue now before all of the spots are claimed. Reach out today to the firm that you regularly work with, or establish a relationship with a firm if you have not worked with one before, so that you will be ready to compute “compensation actually paid” when the time comes.

– Dave Lynn