Equity Expert: A Podcast from the NASPP
News, insights, and conversations on all matters equity and executive compensation. Created and moderated by the National Association of Stock Plan Professionals, the largest association for the stock compensation community, with over two decades of leadership providing expert resources, education, and other benefits for more than 6,000 members.
Equity Expert: A Podcast from the NASPP
How to Manage Burn Rates Through a Stock Price Decline
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National Association of Stock Plan Professionals
Why stock price volatility is a problem when it comes to sizing grants and how using a multiday average and other approaches can help you manage your burn rate.
Episode Notes:
- How companies typically determine grant sizes (0:58)
- The effect of declining stock prices on grant sizes (2:15)
- Pay equity considerations (4:19)
- Using a multiday average to denominate grants (7:14)
- What averaging period to use (10:09)
- Disadvantages of a multiday average approach (14:15)
- Other approaches to manage share usage (15:47)
- Restricting award eligibility to control burn rates (18:38)
Resources Mentioned in This Episode: