Accept no shortcuts when valuing ESOs
Abstract: Employee stock options aren’t just for start-ups and high-tech firms anymore. ESOs not only save on cash, but they also provide an incentive to increase profits and build value. But the administrative side of issuing ESOs can be fraught with complications. This article explains how valuation professionals can help guide businesses through the ESO minefield. The article notes that businesses need to be aware of the accounting and tax requirements involved, and points out that reasonable stock and option valuations prepared by independent valuators can make all the difference.