Do companies with$$ equity$-$based compensation plans make adjustments for changes in the market price of the$$ stock?

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Part $1$

A$.$

The valuation of an$$ equity$-$classified award is based on the market price of the shares measured on the date of the grant and cannot be modified for any$$ reason, as the fair value on the date of the grant was agreed on by both the company and the employee.

B$.$

The valuation of an$$ equity$-$classified award is based on the market price of the shares measured on the date of the$$ grant; however, the valuation can be modified for subsequent changes in the market price of the underlying shares or whenever there is a change in the estimated vesting probability$($i$.$e$.,$ a change in the number of options expected to$$ vest$).$

C$.$

The valuation of an$$ equity$-$classified award is based on the market price of the shares measured on the date of the grant and can be modified for subsequent changes in the market price of the underlying shares.$$ However, equity$-$classified awards cannot be revalued whenever there is a change in the estimated vesting probability$($i$.$e$.,$ a change in the number of options expected to$$ vest$).$

D$.$

The valuation of an$$ equity$-$classified award is based on the market price of the shares measured on the date of the grant and is not modified for subsequent changes in the market price of the underlying shares.$$ However, equity$-$classified awards can be revalued whenever there is a change in the estimated vesting probability$($i$.$e$.,$ a change in the number of options expected to$$ vest$).$