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Performance Conditions

Goals or metrics that must be met to vest all or part of your stock grant (e.g. restricted stock, restricted stock units, performance shares), to trigger the actual grant, or to accelerate vesting. Compare service conditions. See the FAQ on common performance metrics used in stock grants.

Under the ASC 718 accounting rules for stock compensation, performance conditions are goals based on a company's own operations (e.g. EPS, return on capital, revenue). While there is an earnings charge based on the fair value at grant, if the goal is not met at the end of the period there is a true-up for the number of shares actually earned. This allows the reversal of previously recognized accounting charges. Compare this accounting treatment to that of market conditions.

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