SEC Issues Staff Accounting Bulletin on “Spring-Loaded” Compensation Awards to Executives
SEC Issues Staff Accounting Bulletin on “Spring-Loaded” Compensation Awards
November 29, 2021
The SEC staff has issued Staff Accounting
Bulletin (SAB) No. 120, which provides “guidance for companies
about how to properly recognize and disclose compensation cost for ‘spring-loaded
awards’ made to executives.” Specifically, this SAB addresses “estimating the fair
value of share-based payment transactions in accordance with Topic 718 regarding the
determination of the current price of the underlying share and the estimation of the
expected volatility of the price of the underlying share for the expected term when
the company is in possession of material non-public information.” The purpose of SAB
120 is to align the interpretive guidance on this topic in the SEC’s SAB series with
that in the FASB’s ASC 718.
For more information, see the press
release on the SEC’s Web site.