New accounting standards introduced in January 2005 (IFRS 2 or FRS 20 in the UK) means many businesses need to review their share-based payment and incentive plans. Companies are now required to calculate the costs of their plans and disclose this information in their option pricing models. This can be a long and complicated process, especially for those with large volumes of share grants.

As leaders in share options and share valuations, Hewitt can help you calculate the cost of your share-based payments. This includes collecting data such as the value of equity on the grant date, the number of the shares used, and performance targets (if any) as well as judging issues such as the appropriate life of the investment, the expected dividend yield, the expected volatility of the share price, employee turnover, and expected employee behaviour. We review key issues with you, to help you make appropriate choices. As a result you can be confident that your plans meet company needs, satisfy the auditors, meet the requirements of the new accounting standards, and still bring your company value for money.

Read more (PDF format) or contact Jeremy Orbell or David Tuch.