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Submission: On May 15 via manual from US — Scanned from DE
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About Us * About Us * What We Do * Meet the Team * News & Events * Careers * Contact Us * Knowledge Center * Careers * Contact Us * Knowledge Center * Careers * Contact Us Search descriptionIssue Brief Posted on: 2/28/2024 DEMYSTIFYING THE DLOM: DISCOUNTS FOR LACK OF MARKETABILITY FOR POST-VEST HOLDING REQUIREMENTS Josh Schaeffer, PhD David Outlaw Post-vest holding requirements on equity awards, and the discount for lack of marketability that often accompanies such requirements, have become a common feature of the equity compensation landscape. Our experience and anecdotal evidence indicate that up to 10% of S&P 500 companies have such a restriction for their executives. In this issue brief, we explore how and why post-vest holding requirements are built into a compensation program, when a valuation discount is allowed, and some popular and commonly accepted methodologies to estimate a discount. Download This Issue Brief RELATED CONTENT articleBlog Post FASB ISSUES PROPOSED GUIDANCE ON DISCOUNTS FOR LACK OF MARKETABILITY Learn more about the FASB’s proposed improvements to fair value guidance for equity securities regarding DLOMs (discounts for lack of marketability). Read More articleBlog Post PROS AND CONS OF POST-VEST HOLDING PERIODS Post-vest holding periods are a way to tighten alignment between executive and shareholder interests. But for every benefit there’s a hidden drawback. Read More articleBlog Post THE CURIOUS CASE OF MARKETABILITY DISCOUNTS ON PROFITS INTERESTS Why do profits interests receive a valuation discount for lack of marketability while stock options don’t? In this blog post, we take a look at this interesting valuation quirk. Read More articleBlog Post POST-VEST HOLDING REQUIREMENTS: DOS AND DON’TS Is a post-vest holding restriction right for your long-term incentive award? We unpack the dos and don’ts under a variety of circumstances. 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