Shareholder Value Transfer


Also found in: Medical.

Shareholder Value Transfer

A measure of the amount of equity going out of a publicly-traded company when the company's executives exercise stock options. It is measured as the difference between the strike price of the stock options and the fair market value of the company's stock. When an executive receives a stock option, he/she has the right to buy shares in the company at a certain price, regardless of the company's market value. When these options are exercised, the company is deprived of the equity it otherwise would have received had those shares been sold to someone else.
References in periodicals archive ?
Vermilion believes this significant amendment coupled with its conservative and prudent historical VIP use and strong relative market performance, should sufficiently address noted ISS concerns regarding the maximum level of potential shareholder value transfer that could result under the VIP.
In the past, ISS would generally vote for plans that are submitted to shareholders for the purpose of exempting compensation from taxes under the provisions of Section 162(m) absent any additional share request Now, ISS wilt conduct a full equity plan analysis including consideration of total shareholder value transfer, burn rate (if applicable), repricing and liberal change in control provisions.
ISS recommended voting against the stock compensation plans "because of the excessive shareholder value transfer costs.