Introduction to basic option pricing theory (including the Black-Scholes model with the Merton adjustment for dividends, the Binomial Model and how to construct and use binomial lattices);
Typical performance conditions attaching to employee share option schemes, including market-related and non-market-related conditions (which are treated differently for valuation purposes in the financial accounts);
How to gather and calculate the basic input information required for the valuation;
How to value the more complex share options, for example:
1. Where performance conditions link the number of options vesting to relative movements of the company share price against changes in an associated share price index;
2. Where the plan has other market-based performance conditions which could include growth in the company's earnings per share compared to changes in the price of a share price index and/or composite equity/bond market indices;
3. Where the plan has non-market-based performance conditions such as the achievement of particular earnings targets;
4. anticipated changes in volatility of the share price over the period to maturity of the options; and
5. other anticipated changes in key factors affecting the options' value such as changes in interest rates, forfeiture of options attributable to employee leaving the business, re-organisations, etc.
The shares of private companies will need to be valued before options over these shares can be valued. We can assist you in this task.

Tailor-made in-house training:

to include the development of models to address the valuation of employee share option plans and/or convertible shares with unusual or unique performance conditions.

Location

We can arrange to conduct courses in the United Kingdom and in any other countries, world-wide.

Other option valuation assistance

Alternatively, we can provide you with our formal professional opinion as to the value of any of your company's Share-based Payments. We will work closely with your people in defining, and then gathering, the information relevant to any such valuation exercise. We will liaise with the auditors to address any concerns or queries raised by them and to ensure that their requirements for a credible, well supported and well documented conclusion of value are met.

Who should attend?

Finance directors
Investment bankers
Chief accountants
Company secretaries
Other finance staff responsible for IFRS implementation
Audit partners and specialist staff
Valuation experts seeking to acquire expertise in valuing executive options and in the assessment of the impact of complex performance conditions.

How you will benefit

Our courses are tailored to the needs of our clients. For example, you may want your specialist financial/audit staff to receive in-depth training in all aspects of option valuation for the purposes of IFRS 2 implementation or audit. Alternatively, you may not intend to carry out the option valuation yourself but need to gain an overview of option valuation theory and methodologies. You may also want to gain a better understanding of your auditor's requirements. Our training will place auditors in a better position to carry out an audit of the value of options included in financial statements - whether the valuation has been prepared by the audit client or by an independent consultancy.

Contact

Please call Hugh Osburn on +44 (0) 1257 272899 or email: hjo@adopttraining.co.uk or enquiries@adopttraining.co.uk

Relevant articles available on this site: (see the Resources Section)

5. Employee share options and share-based payments
6. Valuing your unquoted companys shares
7. ESOs: Valuing the Impact of Performance Conditions
20. Employee share/stock options: A brief overview of issues relevant to FRS20 valuations

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Meeting your share option valuation needs

Relevant articles available on this site: (see the Resources Section)