Murray Devine has extensive experience in valuing options and other equity-based compensation for financial reporting purposes under FASB ASC 718. In many private transactions, the purchaser of a company issues to the company’s management equity securities or options that are “out of the money”. FASB ASC 718 establishes the framework for assigning value to such equity-based compensation.

Murray Devine’s longtime clients include many of the country’s premier private equity, hedge and venture funds that utilize management compensation criteria involving complex capital structures and multiple classes of stock. Working with these funds and their auditors, Murray Devine has developed the expertise required to understand the most complex compensation plans and apply valuation methodologies that conform to AICPA guidelines.

Murray Devine has experience with a full range of equity valuation methods, including:

  • Option-pricing methods (OPM) – which treat common stock and preferred stock as call options on the enterprise’s equity value. The OPM may involve Black-Scholes modeling, Binomial lattice models, and Monte Carlo simulations.
  • Current-value method (CVM) – which allocates value to the various series of preferred stock based on the series’ liquidation preferences or conversion values.
  • Probability-weighted expected return method (PWERM) – which is based on the probability-weighted present value of expected future investment returns, considering possible future outcomes available to an enterprise.

Hybrid Methods – which involve the use of OPM and PWERM.

  • Armored AutoGroup, Inc.

    a portfolio company of

    Avista Capital Partners

    ASC 718 Stock Compensation engagement

  • Coyote Logistics Holdings, LLC

    a portfolio company of

    Warburg Pincus

    ASC 718 stock compensation engagement

  • American Express Global Business Travel

    a portfolio company of

    Certares, L.P.

    ASC 718 Stock Compensation engagement

  • Allied Barton Security Services

    a portfolio company of

    The Blackstone Group

    ASC 718 stock
    compensation valuation

  • Traeger Wood Pellet Grills

    a portfolio company of

    Trilantic Capital Partners

    ASC 718 stock
    compensation valuation

  • Total Safety U.S., Inc.

    a portfolio company of

    Warburg Pincus

    ASC 718 stock
    compensation valuation

  • Iroko Pharmaceuticals, LLC

    a portfolio company of

    Phoenix IP Ventures

    ASC 718 stock
    compensation valuation

  • Galleon Pharmaceuticals

    ASC 718 stock
    compensation valuation

  • Lenox Corporation

    a portfolio company of

    Clarion Capital Partners, LLC

    ASC 718 stock
    compensation valuation

  • Therakos, Inc.

    a portfolio company of

    The Gores Group

    ASC 718 stock
    compensation valuation

  • Philadelphia Energy Solutions LLC

    a portfolio company of

    The Carlyle Group

    ASC 718 stock
    compensation valuation

  • Emdeon Inc.

    a portfolio company of

    The Blackstone Group

    ASC 718 stock
    compensation valuation

  • Sungard Data Systems

    a portfolio company of

    Bain Capital, The Blackstone Group, GS Capital Partners, KKR, Providence Equity Partners & Silver Lake Partners

    ASC 718 stock compensation valuation

  • Bluestem Brands, Inc.

    a portfolio company of

    Bain Capital, Battery Ventures & Petters Group

    ASC 718 stock
    compensation valuation