Several changes have been made to the methodology for calculating SVT. What is the cumulative effect of these changes?
A.) Valuing full-value awards at the company’s 200-day average stock price coupled with the elimination of the forfeiture rate discount for stock options will translate into higher award values for all award types and consequently higher SVT. The magnitude of the increase in award values and SVT will vary from company to company depending on: (1) how many new and remaining shares and outstanding shares ISS has valued at full-value; and (2) the company’s historical option forfeiture rate. All other things being equal, the greater the number of shares ISS values at full-value and the greater the company’s historical forfeiture rate, the greater the increase in SVT. In addition, companies with outstanding convertible securities and/or warrants will experience an increase in SVT as a percentage of market value; however such companies should also experience a corresponding increase in their allowable caps to account for the transition to undiluted market value, all other things being equal.
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