Course Number: | 22 |
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Category: | Executive Compensation |
Field of Study: | Taxes |
Audience: | Compensation Professionals, HR Managers, HR Generalists |
Level of Difficulty: | Advanced |
Delivery Method: | QAS Self Study |
Prerequisites: | Moderate algebraic training |
Advanced Preparation: | None |
SHRM BASK: | As defined by the SHRM Body of Applied Skills and Knowledge (BASK), this self-study course relates to competencies in Data Analysis with functional areas in Total Rewards. |
Overview | While stock options are not as widely used as an element of compensation as they once were, they are still an important part of executive pay, especially for startups and tech companies compensating for lower salaries or creating an incentive for rapid growth. Stock options are particularly useful in aligning employees’ goals with those of the organization and can make up a significant portion of executive compensation. The Black-Scholes formula is used to place a “fair” value on stock options before they are exercised. It is important to be able to do this because accounting rules require that stock options be expensed based on their fair value at time of grant. Other reasons for valuing stock options before exercise would be for an executive to compare his current compensation with an offer from another company, valuing assets, and tax planning. |
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*The Course Credit List displays credits and credit types offered by location. |
ERI Economic Research Institute is recognized by SHRM to offer Professional Development Credits (PDCs) for the SHRM-CP® or SHRM-SCP®