Failure to Account for Risk in Reporting Equity Awards

, New York Law Journal


In his Executive Compensation column, Joseph E. Bachelder III, special counsel to McCarter & English, writes that treating a "dollar" of equity award as the equivalent of a dollar of salary - without taking into account risk factors such as market risk during the vesting period, dependence on performance targets, clawbacks or forfeiture upon termination - clearly exaggerates the value of the equity award and the value of total compensation.

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