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NoneThe question sounds so basic and friendly. But it’s actually loaded, as many mothers can attest. “Do you just love getting to be home with him all the time?” asks the younger, more put-together woman in the supermarket. “Must be so wonderful.” Wonderful, of course — and sometimes brain-numbing and soul-draining too, some exhausted fulltime moms might reply. Especially if, like in Marielle Heller’s they’d left their prized art gallery job to this other woman. And so Adams responds, twice, showing in this very opening scene exactly why her typically brave, brutally frank performance lifts this movie from an oddly uneven script to something unequivocally worth seeing. First we get the honest answer, the one no one really gives until later in the shower: she feels “stuck inside of a prison of my own creation,” where she torments herself and ends up binge-eating Fig Newtons to keep from crying. She is angry all the time. Oh and, she has gotten dumber. Then we rewind and director-writer Heller has Adams give her real answer: “I do, I love it! I love being a Mom.” There we are, two minutes and 13 seconds into “Nightbitch” and you may already find yourself wowed by Adams. If not, just wait until her Mother is sitting at a chic restaurant with a bunch of colleagues from the art world, and her fangs come out. And we don’t mean figuratively. We mean literally. Let’s go back to the beginning, shall we? “Nightbitch” is based on the 2021 novel by Rachel Yoder, a feminist fable that the author has said came from her own malaise when pausing work for child-rearing. She sets her tale in an unidentified suburb of an unidentified city. Mother (characters all have generic names), formerly an admired installation artist, spends her weekdays alone with her adorable, blond 2-year old Son. Husband has a job that seems to bring him home only on weekends. The early scenes depicting Mother’s life are tight and impactful, a contrast to the confused havoc that will come toward the end of the film. Life revolves around the playground and the home, with occasional trips to storytime at the library where she notes, in narration, that she has no interest in the company of other moms — why should they be friends just because they’re moms? In fact, Mother lives in solitude, and director Heller does a nice job illustrating how that feels you can almost feel the weight of the afternoon coming around, at this comfortable but hardly ostentatious home, when it’s too early for dinner and you’ve done all the activities already and you wonder if you can make it through the day. Then things start to get weird. In the bathroom mirror, Mother starts noticing things. Her teeth are getting sharper. There’s something weird coming out of an apparent cyst at the bottom of her spine. She finds extra nipples. And that’s before she starts eating rare meat. (Also, if you love cats, you may want to close your eyes at one point.) Somewhow Adams, who also produces here, makes these things seem, if not quite natural, then logical. What’s happening is that Mother’s frustration is becoming ferocious. Dangerously ferocious. But also — empowering. At night, or so she thinks, she is a wild dog. Aspects of the film work wonderfully. Mother’s relationship with Son (twins Arleigh and Emmett Snowden) is lovely, largely due to a decision to let the young boys talk freely, with the adult actors reacting to their words. It lends a grounding realism to a film that quickly veers surreal. Less successful is the relationship between Mother and Husband (Scoot McNairy), which takes on too much importance as the film goes on, in a baffling way, rather than Mother’s transformation. (Also, just asking, has anyone in this movie ever heard of a babysitter?) More importantly, a story that posits itself on such a tantalizing idea — that by transforming into a dog, Mother discovers her true nature and power —resorts late in the game to a safer story about a marriage that never seemed appealing enough for us to care about anyway. It doesn’t help that it’s hard to grasp the distracting subplot about Mother’s own mother. None of this takes away from the strength of Adams’ performance. You believe her love for her child as much as you believe her resentment for what he is taking away from her. And Adams can make almost any line work, including one about a walnut. But we digress. It’s an irony that for reasons of storytelling, characters have generic names — because Adams is such a singular and particular, talent. The journey she embarks upon is bizarre indeed, but you won’t regret taking it with her. “Nightbitch,” a Searchlight Pictures release, has been rated R by the Motion Picture Association “for language and some sexuality. “ Running time: 98 minutes. Two stars out of four.Verstappen captures 4th F1 championship after Mercedes sweep of Las Vegas Grand Prix LAS VEGAS (AP) — Max Verstappen cruised to a fourth consecutive Formula 1 championship Saturday night by finishing fifth in the Las Vegas Grand Prix. Verstappen needed only to finish ahead of Lando Norris of McLaren to give Red Bull a fourth straight driver championship. The Dutchman started fifth but was already up to second by the 10th lap around the street circuit that includes the famed Las Vegas Strip. Norris, who had to score at least three points more than Verstappen to extend the championship fight, finished sixth. The race was won by George Russell who was followed by Lewis Hamilton in the first 1-2 sweep for the Mercedes drivers since 2022. Dartmouth sorority, two members of fraternity face charges after student who attended party drowned HANOVER, N.H. (AP) — A sorority at Dartmouth College and two members of a fraternity faces charges related to the death of a student who drowned after attending an off-campus party. The Hanover, New Hampshire police department, where Dartmouth is located, said Friday that Alpha Phi was charged with one count of facilitating an underage alcohol house. Two members of the Beta Alpha Omega face a charge of providing alcohol to a person under 21. Won Jang, 20, of Middletown, Delaware, had attended an off-campus party in July hosted by Alpha Phi sorority. Police said the alcohol was provided by Beta Alpha Omega. Tens of thousands of Spaniards protest housing crunch and high rents in Barcelona BARCELONA, Spain (AP) — Tens of thousands of Spaniards are marching in downtown Barcelona to protest the skyrocketing cost of renting an apartment in the popular tourist destination. Protesters cut off traffic on main avenues in the city center, holding up homemade signs in Spanish reading “Fewer apartments for investing and more homes for living." The lack of affordable housing has become one of the leading concerns for the southern European Union country, mirroring the housing crunch across many parts of the world, including the United States. The average rent for Spain has doubled in the last decade. In cities like Barcelona, rental prices have also been driven up by short-term renters including tourists. Jason Kelce's wife announces she is pregnant with the couple's fourth child Former Philadelphia Eagles center Jason Kelce's wife is announcing she's pregnant with the couple's fourth child. Kylie Kelce posted a photo on Instagram on Friday of the couple's three young daughters reacting to the news. The oldest daughter, Wyatt, appears to be cupping her head in shock. The middle daughter, Ellioette, is smiling. The youngest, Bennett, is in tears. A caption attached to the photo reads: “I feel like we captured a very accurate representation of how each of the girls feel about getting another sister. At least Ellie, mom and dad are on the same page!” Israeli-Moldovan rabbi living in UAE is missing. Israeli officials fear he may have been kidnapped DUBAI, United Arab Emirates (AP) — An Israeli-Moldovan rabbi living in the United Arab Emirates has gone missing, with Israeli authorities raising the suspicion he may have been kidnapped as tensions remain high with Iran. The Israeli prime minister’s office said that Zvi Kogan has been missing since noon Thursday. It said that against the backdrop of information that this was a terrorist incident, an extensive investigation has been opened in the country. Emirati officials did not immediately respond to a request for comment Saturday. State-run media in the UAE, an autocratic federation of seven sheikhdoms on the Arabian Peninsula and home to Abu Dhabi and Dubai, did not immediately report the incident. Alyssa Nakken, first full-time female coach in MLB history, leaving Giants to join Guardians CLEVELAND (AP) — Alyssa Nakken, the first woman to coach in an MLB game, is leaving the San Francisco Giants to join the Cleveland Guardians. Nakken made history in 2022 when she took over as first-base coach following an ejection. A former college softball star at Sacramento State, Nakken joined the Giants in 2014 and was promoted to a spot on manager Gabe Kapler’s staff in 2020, becoming the majors’ first full-time female coach. Nakken has been hired as an assistant director within player development for the Guardians, who won the AL Central last season under first-year manager Stephen Vogt. Nakken, 34, will work with former Giants coaches Craig Albernaz and Kai Correa. Officer kills pet dog mistaken for a coyote in Massachusetts town. The owner says it was unnecessary An animal control officer shot and killed a pet dog in a Massachusetts town after mistaking it for a coyote in an incident local police are describing as a sad mix-up. Police in Northbridge, Massachusetts, say the shooting happened on Tuesday after police received a call of a report of a coyote in a residential backyard. Police say the animal control officer went into the woods to look for the coyote and found what they thought was the animal in a threatening position and shot it. The incident happened as communities around Massachusetts and the country have dealt with an uptick in interactions between coyotes and people. Kendrick Lamar surprises with new album 'GNX' LOS ANGELES (AP) — Kendrick Lamar gave music listeners an early holiday present with a new album. The Grammy winner released his sixth studio album “GNX” on Friday. The 12-track project is the rapper’s first release since 2022’s “Mr. Morale & The Big Steppers.” Lamar’s new album comes just months after his rap battle with Drake. The rap megastar will headline February's Apple Music Super Bowl Halftime Show in New Orleans. The 37-year-old has experienced massive success since his debut album “good kid, m.A.A.d city” in 2012. Since then, he’s accumulated 17 Grammy wins and became the first non-classical, non-jazz musician to win a Pulitzer Prize. NBA memo to players urges increased vigilance regarding home security following break-ins MIAMI (AP) — The NBA is urging its players to take additional precautions to secure their homes following reports of recent high-profile burglaries of dwellings owned by Milwaukee Bucks forward Bobby Portis and Kansas City Chiefs teammates Patrick Mahomes and Travis Kelce. In a memo sent to team officials, a copy of which was obtained by The Associated Press, the NBA revealed that the FBI has connected some burglaries to “transnational South American Theft Groups” that are “reportedly well-organized, sophisticated rings that incorporate advanced techniques and technologies, including pre-surveillance, drones, and signal jamming devices.” Michael B. Jordan uses timeout at women's college basketball game to sign smoldering photo LOS ANGELES (AP) — Snoop Dogg strolled in wearing a jacket with JuJu Watkins’ name and number on the front and back. Michael B. Jordan thrilled a USC female fan with an impromptu autograph during a timeout. The stars came out to the showdown between third-ranked Southern California and No. 6 Notre Dame. The Fighting Irish won 74-61 to remain undefeated in the nationally televised game. The woman held up a smoldering magazine photo of the actor and he indicated he'd sign it. With the arena DJ egging her on, she climbed out of the stands and met Jordan at his seat. He leaned in to ask her name, signed and they shared an embrace.
Young men swung to the right for Trump after a campaign dominated by masculine appealsPresident-elect Donald Trump on Saturday nominated Charles Kushner, the father of his son-in-law Jared Kushner, as the US ambassador to France, in the latest of several controversial picks. Kushner "is a tremendous business leader, philanthropist, & dealmaker, who will be a strong advocate representing our Country & its interests," Trump said on his Truth Social website, adding that Jared "worked closely with me in the White House." The choice is in keeping with Trump's pattern, so far, of selecting people, often wealthy, who are close to his family or of proven loyalty. Kushner is a multimillionaire real estate executive and former attorney; his son was a senior adviser during Trump's first term. Trump did not mention, however, that the elder Kushner once served jail time -- a two-year sentence, most of it served in a federal prison. Kushner, who is now 70, pleaded guilty in 2004 to 18 counts of tax evasion, witness tampering and making illegal campaign contributions. The case, which was prosecuted by then US attorney Chris Christie, included sordid details, to which Kushner admitted: that he had hired a prostitute to seduce his brother-in-law, a man cooperating in a campaign finance inquiry, and then videotaped the encounter and sent it to the man's wife, Kushner's sister, to dissuade her from testifying against him. Christie, who worked on Trump's first presidential transition team and then opposed him in this year's Republican primary contests, later said Kushner had committed a "loathsome" and "disgusting crime." In 2020, Trump issued a pardon to Kushner, whose conviction had resulted in him being disbarred in three states. Nominees for key ambassadorships are often business associates of a president-elect, or major political donors. But it is rare, if not unprecedented, to name a convicted felon. The first two men to fill the prestigious Paris post were famed inventor and statesman Benjamin Franklin and a future president, Thomas Jefferson. If confirmed, Kushner would succeed Denise Bauer, a former ambassador to Belgium who was a major Democratic fundraiser and donor. md/bbk/md
Two European satellites successfully launched into space from India
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tend to grow their financials above the industry average, thus offering higher return potential. People are ready to pay a premium to own these stocks given their higher return potential, thusly raising their valuations. Though given the developing nature of their business and higher valuations, growth companies are considered riskier. So, investors with higher risk tolerance abilities and longer investment horizons can buy these stocks to earn superior returns. Celestica ( ) has been one of the top performers over the last two years, with returns of over 730%. Its solid financials and exposure to the high-growth artificial intelligence(AI) sector have boosted its stock price. Amid the increased usage of AI, hyperscalers are investing in expanding their AI-ready data centres, which has fueled the demand for switches, high-performance computing platforms, and storage solutions. Meanwhile, Celestica could benefit from this demand growth, given its innovative product offerings and new launches. In April, the company acquired NCS Global Services, an IT infrastructure and asset management company in the United States. Besides, it recently forged a strategic relationship with Groq, which specializes in accelerated inferencing. Considering all these growth initiatives and a favourable environment, I expect the rally in Celestica’s stock price to continue. Shopify Another growth stock I am bullish on would be ( ), which offers essential internet infrastructure for commerce to businesses worldwide. The company posted an impressive third-quarter performance in October, with its revenue and operating income growing by 26.1% and 132%, respectively. Its operating margin improved from 7.1% to 13.1%. The company also generated free cash flows of $421 million during the quarter, representing 19% of its revenue – a 300 basis points improvement from the previous year’s quarter. Moreover, the growing transition towards an omnichannel selling model has created long-term growth potential for Shopify. Meanwhile, the company continues to develop innovative products to meet the growing needs of its customers. It also focuses on personalizing the customer experience, which has been gaining traction among mid-market merchants. The increasing adoption of its payments platform and strengthening of its business-to-business (B2B) offerings could also support the company’s growth. So, I expect the uptrend in Shopify’s financials and stock price to continue in the coming years. WELL Health Technologies ( ) develops technology and services to aid healthcare professionals in delivering positive patient outcomes. The digital healthcare company posted an impressive third-quarter performance last month, with its topline growing by 23%. Solid organic growth and acquisitions in the previous four quarters more than offset the decline from divestments to drive its sales. It had 1.48 million patient visits during the quarter, representing a 31% year-over-year increase. Its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) to WELL shareholders grew 10% to $25.1 million. Meanwhile, the growing adoption of telehealthcare services, digitization of patient records, and usage of software solutions in healthcare have expanded the addressable market for WELL Health. The company continues to focus on developing innovative products to strengthen its footprint. Besides, it has a solid acquisition pipeline, with 17 letters of intent and definitive agreements. Also, the company’s valuation looks attractive, with its NTM (next 12 months) multiple at 1.5, making it an attractive buy.
Republicans rally around Hegseth, Trump's Pentagon pick, as Gaetz withdraws for attorney general‘Living in a home that damages health the norm for far too many older people’Flag football uses talent camps to uncover new stars
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Wall Street Rebounds Without Its AI Darling's Boost, King Dollar Maintains Dominance While Bitcoin Defies Gravity: This Week In The Markets - BenzingaBiometrics for fraud protection have become a critical piece of the online world, minting billion-dollar companies, but one of the top consultancies in the field says that by combining biometrics with other technologies, identity verification providers can tap into an emerging growth opportunity. The most-read story of the week on was Liminal’s forecast for Identity Authorization Networks, which notes ID.me, fresh off a fundraise at a $1.8 billion valuation, as a potential winner in the segment. The trial of age assurance technology in Australia by ACCS and NEC’s new imaging technology are other examples of face biometrics being layered with other technologies to address familiar problems in new ways. Digital identity networks that include enterprise identity and fraud protection capabilities are defined by Liminal as (IANs), and the consultancy pegs their market opportunity at $15.5 billion by 2028, just in the U.S. The new report says Proof, ID.me, Entrust, Clear, Visa, DocuSign and Google are ready to stand up IANs now, while Jumio and Socure are just a step behind in readiness to address the emerging market. ID.me raised $67 million in a tender offer valuing the firm at $1.8 billion, and made an appearance at number 315 of the Deloitte Technology Fast 500. The company says it is adding 60,000 new users daily and its revenue grew by 370 percent from 2020 to 2023, leading to next year. A bipartisan group of 14 American Senators has called for an . The Senators claim concern about the technology’s accuracy, necessity and impact on privacy, and suggest Congress should block the program’s expansion, pending “rigorous congressional oversight.” They say the agency has not provided sufficient evidence that the use of biometrics is necessary to spot fraud or speed up passenger processing. The new biometric pre-enrollment app intended to make the EU’s EES border control system operationally feasible was presented by Frontex at an iMARS conference last week. The , hurriedly developed in 10 months, has been through two tests, but the face biometric verification and chip reading functions are still being improved. ACCS CEO Tony Allen filled in the details of and released the full project plan this week. The trial relies heavily on the ISO/IEC DIS 27566-1 standard, and will examine a range of options, from biometric facial age estimation to inference based on data like purchasing history, for their effectiveness and privacy protection. A pair of American legislators and Meta think for age verification, with the social media giant offering up a metaphor that may apply in the metaverse, but not in meatspace. Apple disagrees, naturally, but has the AVPA and ACCS on its side. NEC has introduced a technology for capturing both , without adjusting the camera between modalities. The capability is delivered in a compact camera module that could go in POS devices, ATMs or tablets, and works on lower-resolution images, the company says. Generative AI is enabling fraudsters to gather information about their targets, tailor attacks to specific banks and defeat authentication checks, Feedzai Senior Director of Data Science Xin Ren writes in a guest post for . The combination of across the financial industry, however, can defeat even these sophisticated attacks. Illuma Founder and CEO Milind Borkar tells the the origin story of his voice biometrics business as a research and development contractor for the federal government, and its pivot to serving financial institutions. He talks about why demos of Illuma’s voice recognition look nearly the same even as the technology improves, and the difference between AI and machine learning. The number of e-Tazkira has grown by 8.1 million to 12.2 million in total since the Taliban took over in 2021, but rural numbers are low, and the cost has been increased fivefold. The NSIA is opening new centers and deploying mobile teams, and the government claims improvement, but regional disparities and claims of corruption linger. A pre-release edition of the UK’s DIATF has been published as businesses and regulators prepare for the passage of the Data (Use and Access) Bill. The framework is restructured in version 0.4 for ease of navigation, and makes . DHS’ OBIM is looking into migrating a pair of latent fingerprint biometrics databases holding more than . An RFI seeks a cost estimate for a cloud system that can search those databases 3,000 a day, between them, within specified times, and also asks about accuracy. Please let us know about any interviews, podcasts or anything else we should share with the people in biometrics and the digital identity community either in the comments below or through social media. | | | | |
This article is the sixth in our series on equity-based compensation intended to assist employers with answering a common question: What type of equity compensation award is best for our company and our employees? The first article is available here , the second article is available here , the third article is available here , the fourth article is available here , and the fifth article is available here . This article will provide an overview of cash-settled equity awards. As an overview, this article will address only certain key aspects of cash-settled equity awards. It is not intended to provide comprehensive treatment of these awards. In addition, all discussion of taxes is limited to U.S. Federal income tax. What is a Cash-Settled Equity Award? The term “cash-settled equity award” generally encompasses any compensatory award that is (1) valued on the basis of an underlying equity security, but (2) settled with a cash payment rather than the issuance of shares. By way of example, a cash-settled stock appreciation right (SAR) is a cash-settled counterpart to a stock option, representing the right to receive, upon exercise, a cash payment equal to the excess of the value of the underlying share over the exercise price (sometimes referred to as the grant price or the strike price) rather than, in the case of a stock option, a right to acquire a share through payment of the exercise price. Another common example is a cash-settled restricted stock unit (RSU), which is a cash-settled counterpart to restricted stock, representing the right to receive, upon settlement after vesting, a cash payment equal to the value of the underlying share rather than, in the case of restricted stock, the right to retain, upon vesting, the shares issued at grant. Cash-settled equity awards are often referred to as “phantom equity” or “phantom stock” because, although their value is based on the value of shares of stock or other equity interests, they do not represent the right to receive actual shares or other equity interests in an entity. This article will focus on cash-settled SARs and cash-settled RSUs, two of the most common types of cash-settled equity awards. Why Grant Cash-Settled Equity Awards? Cash-settled equity awards are often granted by employers to employees or other service providers (such as directors and consultants) because they help to align the service provider’s interests with those of the employer’s shareholders (see “Advantages” below), but do not result in dilution to shareholders because no actual shares are issued. For publicly-traded companies, cash-settled equity awards can be attractive because they are not subject to the stock exchange requirement that, in general, shareholders must approve equity compensation involving the issuance of actual shares. What Are Some Typical Terms of Cash-Settled Equity Awards? Cash-settled equity awards often have terms similar to their “real” equity counterparts. By way of example, cash-settled equity awards often have a vesting schedule during which the service provider must remain employed or in service for the cash-settled award to become exercisable, in the case of cash-settled SARs, or vested and settled in cash, in the case of cash-settled RSUs. Vesting schedules often range from three to five years in total, with some form of ratable vesting over the entire service period. The vesting schedule selected, like the vesting schedule for “real” equity, will typically reflect a balance between the employer’s desire to maintain a longer-term retention incentive and the need to ensure that the service provider perceives the vesting schedule as achievable. Performance goals may also be included as a condition of vesting or exercisability. Tax Treatment Cash-Settled SARs Cash-settled SARs are treated similarly to nonqualified stock options for tax purposes. In general, cash-settled SARs do not have any immediate tax consequences for the employer or the service provider at grant or vesting. Instead, the tax recognition event occurs when the cash-settled SARs are exercised. At the time of exercise, the service provider typically recognizes ordinary income in the amount of the cash payment, which is generally equal to the amount by which the fair market value of the stock underlying the cash-settled SAR exceeds the exercise or grant price (the “spread”), and the employer will generally receive a corresponding tax deduction. For employee holders of cash-settled SARs, the spread is generally treated as supplemental wages for tax withholding purposes and is reportable as such on the employee’s Form W-2. For non-employee holders of cash-settled SARs, the spread is generally treated as compensation and reportable on the appropriate Form 1099. To receive the tax treatment described above, however, cash-settled SARs must satisfy a few requirements, including the following: Compensation payable under the cash-settled SAR cannot be greater than the excess of the fair market value of the underlying stock on the date the SAR is exercised over the exercise or grant price of the SAR with respect to a number of shares fixed on or before the date of grant of the SAR. The exercise or grant price of the cash-settled SARs must be set no lower than the fair market value of the underlying stock at the time of the grant. (See “Disadvantages” below.) The cash-settled SARs must relate to the stock of the entity for which the service provider provides services or a parent of that entity. Cash-settled SARs cannot generally be granted in relation to the stock of a subsidiary of the entity for which the service provider provides services. The cash-settled SARs may not have any additional feature for the deferral of income beyond the date of exercise. If a cash-settled SAR meets all of these requirements, it generally will be exempt from the tax rules on nonqualified deferred compensation known as Code Section 409A and therefore receive the tax treatment outlined above. If a cash-settled SAR does not meet all of these requirements, then it may be subject to Code Section 409A, which imposes strict requirements on the timing of deferred compensation and, if such requirements are not met, a 20% penalty tax and other adverse tax consequences. Because cash-settled SARs often do not satisfy the timing requirements of Code Section 409A, it is generally desirable that they satisfy the four requirements above to qualify as exempt from Code Section 409A. Alternatively, cash-settled SARs that do not satisfy all of the four requirements above may be structured as an arrangement that is subject to, and compliant with, Code Section 409A, but doing so typically involves the holder of the SAR giving up significant flexibility regarding their ability to choose when to exercise the SAR. Cash-Settled RSUs There are generally no income tax consequences at the time a cash-settled RSU is granted; rather, the value of the RSU is taxed as ordinary income and subject to income tax withholding, if applicable, when the award is settled. A recipient may not make an 83(b) election related to an award of cash-settled RSUs. FICA will be due with respect to employee-held RSUs when the RSUs are not subject to a substantial risk of forfeiture (such as upon retirement eligibility), even if they are not settled until a later date. The company will generally be eligible to take a deduction with respect to cash-settled RSUs when the recipient recognizes ordinary income. Advantages Cash-Settled SARs Cash-settled SARs have several potential advantages as an incentive compensation vehicle: There is a possibility of large gains if the stock value increases significantly, which can be highly motivating to employees and other service providers and help to align their interests with shareholders. Cash-settled SARs are generally easy to understand, making it more likely that service providers will perceive them as valuable as long as the stock value is believed to be likely to increase. The employer generally receives a tax deduction corresponding to the compensation recognized by the holder of cash-settled SARs upon exercise. Cash-settled SARs (in contrast to incentive stock options) may be granted to non-employee service providers, such as consultants and directors. Cash-settled SARs, in contrast to stock options, do not require the holder to provide cash upon exercise to fund the exercise price and, in the case of nonqualified stock options, withholding taxes. Cash-Settled RSUs Cash-settled RSUs have potential advantages as an incentive compensation vehicle: Cash-settled RSUs generally require no personal investment from recipients. From the company’s perspective, granting a recipient a cash-settled RSU does not give the recipient any rights as a shareholder. Cash-settled RSUs provide similar economic incentives to holders as restricted stock or stock-settled RSUs, aligning their interests prior to settlement with those of shareholders, but, in contrast to restricted stock or stock-settled RSUs, they do not result in dilution to shareholders. Disadvantages Cash-Settled SARs Some potential disadvantages to cash-settled SARs include the following: Because of the exercise or grant price, cash-settled SARs have no value to the holder unless the value of the underlying stock increases above the exercise or grant price. If the stock does not increase in value, or declines in value, cash-settled SARs can quickly lose their motivating power or even become demoralizing if the stock value remains below the exercise or grant price for an extended period. Upon exercise, the amount of cash received (the spread of the SARs) is taxed as ordinary income. There is no opportunity for capital gains treatment. If the holder of the cash-settled SAR is an employee, the income is also subject to tax withholding and employment taxes. Upon exercise, the company must pay cash equal to the spread and, in contrast to stock options, receives no cash from the holder through payment of the exercise price. To set the exercise or grant price, the employer generally must determine the fair market value of its stock at the time of grant within the framework of Code Section 409A, which can involve incurring additional costs if the company is not publicly traded and an independent third-party appraisal is used. Cash-Settled RSUs Some potential disadvantages to cash-settled RSUs include the following: Cash-settled RSUs provide no opportunity for capital gains. Cash-settled RSUs may be subject to Code Section 409A, which limits the flexibility in design and can introduce significant complexity. Cash-settled RSUs can raise concerns under ERISA if the payout occurs only upon termination of employment or after more than 10 years. Other Considerations Accounting Whether equity awards are settled in cash or shares is relevant to their accounting treatment. Although a full discussion of the accounting of cash-settled equity awards is beyond the scope of this article, in general, RSUs or SARs that can be settled only in shares receive “fixed” accounting treatment similar to their real equity counterparts. The fair value of the award, determined at the time of grant, is typically expensed over the service period. If awards must or may be settled in cash, on the other hand, then they may be subject to liability or variable accounting, requiring them to be marked to market periodically. Documentation Cash-settled equity awards, like their real equity counterparts, are normally documented using either (1) a plan containing the main terms and conditions applicable to the awards, with individual award agreements given to each recipient setting forth the particular terms and conditions of their awards, such as the number of shares subject to the award being granted, the exercise or grant price (if applicable), and the vesting period, or (2) a stand-alone award agreement including all of the material terms for the specific award. Whether the board of directors or management can approve cash-settled equity awards typically depends on the amount involved and the materiality of the amount to the organization. As we noted at the beginning of this article, because the article is intended as an overview, it addresses only certain key aspects of cash-settled equity awards and does not provide a comprehensive discussion. If you have questions about the topics covered in this overview of cash-settled equity awards not addressed in this article, or if you would like to explore other equity compensation alternatives, please refer to the other articles in this series, or contact your Foley attorney for more information.A look at holiday shopping trends as Black Friday approachesTrump taps Charles Kushner, father of his son-in-law, as envoy to France