The NASPP Blog

Appropriate award valuation is critical to many aspects of a well-run stock compensation program.  For today’s “Meet the Speaker” interview, we feature an interview with Jon Burg of Radford, an Aon Hewitt Company, who will lead the session “Equity Values of a Different Flavor,” which will discuss the purposes for which awards are valued and various approaches to valuation. Here is what Jon had to say about this topic:

NASPP: Why is equity award valuation a particularly timely topic right now?

Jon: The valuation of options and awards is not just an accounting concept; the need to know the value of equity is common for compensation planning, grant guidelines, pay-for-performance, and other purposes. Deciding on the appropriate method continues to be a controversial issue. Multiple valuation approaches exist depending on the application–and the differences in these sensitive valuations can be significant and lead to awkward or conflicting discussions with the board, shareholders and employees. Should there be convergence or consistency in valuations for accounting, HR, and other purposes or are there reasons to apply different approaches for different applications? This panel will provide an overview of some of the existing challenges and highlight current best practices, along with pros and cons of an attempted movement to standardize valuations across multiple surveys.

NASPP: How can stock plan administrators contribute to the valuation process?

Jon: Arm yourself with the knowledge and understanding of these varying valuation approaches. It is critical to understand how survey methodologies vary so your grant guidelines are developed on an apples to apples basis. Review the various disclosure examples using realized and realizable pay in order to know whether additional disclosure for your company is warranted.

NASPP: What is the silver lining to equity award valuation?

Jon: While there is plenty of confusion to go around, there is always opportunity. You can develop equity guidelines that are better aligned with the marketplace. You can tell a better and more accurate compensation story to your shareholders. You can make design changes to achieve certain goals with minimal impact to employee perceived value.

NASPP: What is your secret (or not-so-secret) superpower?

Jon: I have an inner Forrest Gump that can keep my legs moving for long periods of time.

About the NASPP Conference
The 21st Annual NASPP Conference will be held from September 23-26 in Washington, DC. This year’s program features 60+ sessions on today’s most timely topics in stock compensation; check out the full agenda and register today! You don’t want to miss Jon’s session, “Equity Values of a Different Flavor.”