The Impact of COVID-19 on Stock Options: Whether to Reprice or Not

Stock options are a common form of long-term incentive compensation, among public and private companies, that aligns the interests of employees and executives with those of shareholders. Due to the current downturn in global market conditions caused by COVID-19, many companies are now facing a situation where outstanding employee stock options are significantly underwater (i.e., stock options have an exercise price greater than the current market price). As a result, it’s expected that stock option repricing will reemerge as a “hot topic” of discussion.

This paper summarizes key strategic, talent, and technical considerations for boards and cross-functional management teams as they evaluate strategies related to stock option repricing. 

*The file is an Adobe Acrobat PDF. If you experience difficulty opening the downloadable file, you may need to download the free Acrobat Reader.

Contacts

Dimitri Drone Managing Director, Head of Corporate Valuation Advisory Services
Matt Vnuk Partner, Compensation Advisory Partners
Matt Dodd Director, Accounting and Financial Reporting Advisory Services
Ben Sparks Vice President, Transaction Advisory Services

You are about to leave
Houlihan Lokey's website

The link below leads to a website that is not
owned by Houlihan Lokey.


Continue to the external website,
or
close the window to remain on HL.com