Use Case · For the CFO

Up to

15×

Every dollar of expense becomes a multiple of value.

Public companies are valued at a multiple of earnings. For every dollar Carver Edison removes of SBC expense, it creates a multiple of shareholder value.

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Improve EPS III / IV

The Problem

Stock-based compensation is an operating expense flowing through your income statement. It reduces earnings. And the market values your earnings at a multiple - so every dollar of SBC quietly costs you many dollars of market value.

01.

SBC is an operating expense

Stock-based compensation is recognized as a GAAP operating expense - the same line that captures cash compensation. It reduces net income dollar for dollar, every quarter, on your income statement.

02.

Earnings trade at a multiple

Public companies are valued at a multiple of earnings - 15×, 20×, sometimes 30× or more. Each dollar of net income translates into many dollars of market capitalization. Every dollar lost to expense compounds the same way.

03.

SBC compounds the cost

$100M of SBC expense isn't a $100M problem. At a 15× multiple, it's a $1.5B drag on your market value - every year. Carver Edison removes the expense at the source so the multiple finally works for you instead of against you.

The Mechanism

Take the expense off the income statement. Let the multiple do the rest.

Carver Edison's Cashless Participation® can eliminate the SBC expense weighing on your income statement - without changing what employees receive. The earnings lift converts to market value at the multiple your stock already trades at.

Traditional Equity Comp

SBC sits on the income statement. The multiple works against you.

SBC expense lineRecognized

Net income impactReduced

At a 15× P/E$1 expense = $15 of value lost

Market value impactDrag

Cashless Participation®

Same grants. No expense. The multiple works for you.

SBC expense lineEliminated

Net income impactLifts directly

At a 15× P/E$1 saved = $15 of value created

Market value impactPositive

Same grants. Same comp philosophy. The expense leaves the income statement - and the market follows the multiple.

The Outcome

What this looks like.

Every dollar of SBC expense Carver Edison removes flows directly to net income. At your P/E multiple, the market translates that earnings lift into many dollars of shareholder value.

Illustrative example

$85M to earnings. $1.275B in market value. Same grants.

For a company with $100M in annual SBC and a P/E multiple of 15.

Today

Annual SBC expense $100M

Annual earnings lift —

At a 15× P/E multiple —

Year 1 shareholder value —

3-year shareholder value —

With Carver Edison

Annual SBC expense $15M

Annual earnings lift $85M

At a 15× P/E multiple 15×

Year 1 shareholder value $1.275B

3-year shareholder value $4.019B

Methodology: Cashless Participation eliminates 85% of SBC expense ($100M → $15M), so $85M flows directly to net income. The market caps that earnings lift at the company's P/E multiple: $85M × 15 = $1.275B in Year 1. SBC savings grow 5% annually with the comp budget, so 3-year cumulative shareholder value = ($85M + $89.25M + $93.71M) × 15 = $4.019B.

15×

Every dollar of expense becomes a multiple of value.

SBC is an operating expense

Earnings trade at a multiple

SBC compounds the cost

Take the expense off the income statement. Let the multiple do the rest.

SBC sits on the income statement. The multiple works against you.

Same grants. No expense. The multiple works for you.

What this looks like.

$85M to earnings. $1.275B in market value. Same grants.

Lifting earnings is the result. These are the levers.

Reduce SBC Expense

Reduce Dilution

Maximize Your Buyback

See what your multiple does with the expense gone.