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NASPP Essentials

Award Modifications: Key Considerations
May 05,2020

A chart comparing the key considerations for common types of modifications to equity awards.

Accounting for Equity Compensation in the United States
Dec 31,2019

Written for readers without an accounting background, this article provides a summary of the treatment of stock compensation under US GAAP. Also includes highlights of differences between the US GAAP and IFRS with respect to stock compensation.

Latest Developments

EITF Issue 13-D Explained
Apr 01,2014

On March 13, 2014, in response to a persistent issue regarding the recognition of expense for performance awards, the Financial Accounting Standard Board's ("FASB") Emerging Issues Task Force ("EITF") determined that a performance target which can be achieved after an employee provides the requisite service, is a performance condition that affects the vesting of the awards (not a condition that can affect the grant date fair value of the awards). Therefore, compensation cost should be recognized if it is probable that the performance condition will be achieved. This EITF ruling narrows the scope of acceptable accounting practices, only allowing the use of the performance condition approach.

FAQ: U.S. Equity Compensation Plans (2017)
Dec 16,2016

Proxy advisory firm ISS provides an FAQ addressing questions about how they evaluate U.S. equity plans.

Equity Vesting Acceleration upon a Change in Control
Oct 01,2010

Equity-based compensation – whether in the form of stock options/stock appreciation rights (SARs), restricted stock/restricted stock units (RSUs) or performance shares – is an integral part of executive long-term incentive programs. A common provision in the governing documents addresses how an executive's unvested interests are treated if there is a change in control of the company. Since a significant portion of an executive's wealth is often tied to the value of equity-based compensation, the conditions for accelerated vesting are particularly important.

Implications of Modifying Underwater Share Options
Apr 01,2009

Many companies, knowing that out-of-the-money, or underwater, share options can affect the morale and retention of key employees, are considering whether and how to modify outstanding awards. Companies exploring strategies should understand their accounting implications as well as the business, organizational, and regulatory concerns that are the context for the strategies. This edition of Defining Issues describes the accounting implications of the more common approaches and some basic factors that should be considered when a company tailors a strategy to its specific circumstances.

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Accounting for Acceleration of Vesting Upon Termination
May 27,2020
Barbara Baksa

How to account for acceleration of vesting upon termination of employment, explained in fewer than 75 words.

5 Things to Know About Award Modifications
May 05,2020
Barbara Baksa

Five things to be aware of before you modify equity awards. You for sure don't want to forget about #4.


Breaking Up Is Hard to Do: Executives, Terminations, and Equity Compensation
Apr 23,2013

Everything you need to know about departing executives and their stock compensation!

How Upcoming Tax Rate Changes Impact Your Stock Plans
Jul 27,2010

Learn how higher tax rates impact your stock plans and what your employees should be doing now to prepare!

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