In recent years, Directors of emerging companies have responded to increased scrutiny of equity based compensation reporting (IRC §409A and ASC 718) by arranging for independent valuations. Under §409A, the IRS scrutinizes issuances of stock options to ensure the exercise price is at or above the Fair Market Value of the underlying stock at the grant date. Tax exposure at vesting as well as penalties is at stake if this requirement is not met. Stock option issuances also play a large role in stock compensation expense for a growth company’s financial reports and must adhere to AICPA guidelines as well as receive sign-off from Auditors. Our clients choose Pluris to assist them with their equity based compensation compliance needs because of our:
- LiquiStat Database™ which provides us with data on comparable emerging private companies that trade on the SecondMarket platform.
- Experience with growth companies.
- Experience with valuations of complex securities and capital structures that require rigorous analytical models.
- High quality valuations that are performed by our U.S. based senior staff.
- Experience defending our opinions with the IRS and Audit Teams.
Most clients require these valuations every 12 months. However, we perform such valuations more often when a significant company event could potentially alter its value.