Use Case · For the CFO

Up to

Designed to lower SBC expense while keeping every grant.

A different issuance mechanism designed to deliver the same equity compensation with materially less GAAP cost. Structured to deliver cleaner earnings, lifted EPS, and an end to the buyback treadmill, without changing what your people earn.

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Reduce Stock-Based Comp. Expense I / VIII

The Problem

SBC has become the largest non-cash expense on most large-cap income statements - and it's growing faster than the comp programs that drive it. The expense is real, the EPS drag is real, and the standard playbook to offset it is expensive and temporary.

01.

SBC is an operating expense, not a footnote

Stock-based compensation flows through operating expenses. For large public companies, that's hundreds of millions a year reducing net income on the line investors watch most.

02.

The expense compounds with every grant cycle

Each new grant adds to the SBC stack. Programs that scale headcount or grant value see SBC growth outpace revenue growth, which compresses margins quarter after quarter putting pressure on your stock price.

03.

The usual fixes don't solve it

Companies typically address SBC pressure with buybacks (expensive, recurring) or by cutting grants (costly to retention). Neither addresses the underlying issuance mechanism that drives the expense.

The Mechanism

Same compensation philosophy. A different issuance structure. A fraction of the GAAP cost.

Cashless Participation® is designed to eliminate the SBC drag on your largest equity programs without changing comp philosophy or what employees receive. Same grants, significantly lower GAAP cost on your income statement.

Traditional Issuance

Standard grant issuance. Full SBC recognized over the service period.

Issuance structureGrant

Comp philosophySame

Employee grantsSame

SBC expenseRecognized

EPS impactDrag

Cashless Participation®

Cashless issuance. SBC drag eliminated without changing comp philosophy.

Issuance structureCashless

Comp philosophySame

Employee grantsSame

SBC expenseMaterially reduced

EPS impactPositive

Cashless is designed to preserve the same employee economic value while removing the SBC line driving the largest expense.

The Outcome

What this looks like.

Up to 85% less GAAP SBC expense flowing through the income statement. Same grants delivered to the same employees, recognized at a fraction of the cost.

Illustrative example

Over $4 billion of shareholder value created in 3 years.

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

Today

Annual SBC expense $100M

Annual SBC savings —

Year 1 shareholder value created —

3-year shareholder value created —

With Carver Edison

Annual SBC expense $15M

Annual SBC savings $85M

Year 1 shareholder value created $1.275B

3-year shareholder value created $4.019B

Methodology: 85% SBC reduction in Year 1 ($100M → $15M = $85M saved), growing 5% annually. Shareholder value = annual SBC savings × P/E of 15. 3-year total = ($85.000M + $89.250M + $93.713M) × 15 = $4.019B.

Outcomes are not guaranteed and vary based on company-specific factors and market conditions.

See what up to 85% looks like for your plan.

Book a 30-minute walkthrough with our team. We'll model your actual numbers, surface the projected SBC and dilution impact, and walk through what implementation looks like at your company.

Request a demo