When an employee is awarded performance-based vesting rights, the vesting schedule for that employee is manually updated to reflect this change. As a next step, the company has to recognize or approve the performance parameters as achieved, partially achieved or not achieved either at grant level or in bulk.
By doing this, the company can verify the performance against the vesting rights and approve the appropriate % of vesting. The remaining options get cancelled.
To recognize performance conditions in Bulk:
- Click Equity Awards in the left menu, select Grants.
- Click Select Action dropdown, select Recognize Performance Conditions.
The Performance Condition Recognition page is displayed.
By default, the Status filter will be set to “Due” and this will display all the tranches that is due to be recognized.
You can filter the grants that is associated with performance conditions. The filters available are:
- Performance Condition: search by a performance condition.
- Stakeholder: search by stakeholders
- Grant ID: search by grant ID
- Vest Date: search by vest date with a start date and end date, range is limited to 60 days.
- Status:
- Due (Red Exclamation) - The default filter selected is Due. This will display all the tranches that is past its Vesting Date and not yet been recognized.
- Not evaluated (Grey Exclamation) : This will display all the tranches that are not evaluated yet.
- Evaluated (Green Tick): This will display the tranches that has been successfully evaluated.
Options Due to Vest: Depending on the filters selected, displays the total count of the Options Due to Vest
Options Vested: Depending on the filters selected, displays the total count of the Options Vested
Options Cancelled: Depending on the filters selected, displays the total count of the Options Cancelled
3. Select the grants using the Check box.
4. Select the Recognition Date. Cannot be before the Grant Date. This date is to specify that the performance condition is recognized on this date. You can use the Copy Down, drop-down - Apply to - This Page and All Pages will be displayed. From the selected Tranche for which the Copy Down is applied, the value will be copied down to all the below tranches on the same page or all the pages based on the option chosen (this page or all pages) from the drop down.
5. Check the Achieved box. By default this box is selected. Unchecking this, it auto-populates the payout percentage as “0” and the options due to vest will move to the cancelled column.
Note: if you uncheck this box, you have an option to choose this selection for all the grants on the same page or all the pages.
6. Enter the Payout Percentage Value. The Percentage Value is depending on the Performance Criteria the employee meets. Value entered should be within the range specified in the Condition Column
7. Options Vesting is auto calculated based on the Payout Percentage Value.
Example:
Options due to Vest – 10000
Payout Percentage – 70%
Options Vested – 7000
Options Cancelled – 3000
8. Options Cancelled is auto populated based on the Payout Percentage Value entered.
Calculation: Options due to vest - Options Vested
9. Click on Recognize. It will display a confirmation popup.
Note: If there are any errors, the Recognize filed will be disabled and it will be available when all the errors are validated.
10. Click on Yes, Recognize
Note: If the Performance Condition is successfully Evaluated, the grant status changes to Evaluated.