We value employee equity using terminology and structures relevant to the UAE, rather than importing schemes designed for other tax systems.
Situations
When UAE clients ask for this valuation
- 1You are launching an ESOP and need the value of the ordinary shares.
- 2Options are being granted and an exercise price must be set.
- 3IFRS 2 requires the fair value of awards at grant date.
- 4Management is receiving growth or sweet equity in a buyout.
Who asks us
Typical clients
- Founders and boards
- CFOs and HR leaders
- Investors
What we value
The subject of the valuation
Ordinary shares underlying awards, share options, restricted shares, phantom equity and management incentive shares.
Our method
How we reach the figure
We value the company and the ordinary shares, then the awards themselves, reflecting exercise price, vesting conditions, expected life and volatility using option pricing models such as Black-Scholes or Monte Carlo simulation where the terms require it.
| Income | Company value, then the ordinary shares | Usual starting point |
|---|---|---|
| Option | Black-Scholes or Monte Carlo for the awards | Usual starting point |
| Market | Recent funding round prices | Cross-check |
Value drivers
Points that move the value
- Share value
- The value of the underlying shares at the grant date.
- Award terms
- Exercise price, vesting, performance conditions and exit triggers.
- Dilution
- The effect of the option pool on existing shareholders.
Documents
What we will ask you for
- Plan rules and award letters
- Capitalisation table
- Recent funding terms
- Financial information
The full list is tailored to your company once the scope is agreed.
Report, timing & fees
What you receive, and when
A grant-date valuation report and, where required, IFRS 2 schedules for the accounts.
Timing
Usually two to four weeks.
Compare report levels on our reports and deliverables page.
Questions
Questions clients ask about this service
- Do UAE employees pay tax on options?
- The UAE does not levy personal income tax, but employees in other jurisdictions may be taxed. Tax questions should be referred to your adviser.