A share-based payment that includes features such as dividend payments or adjustments to the exercise price for dividends declared. These "dividend protection" features have certain accounting implications for both expense recognition and earnings per share (EPS) calculations, as discussed in an article
from The CPA Journal
. It reports that these types of stock awards have gained popularity recently due to the emergence of SPACs
, which often use compensation earnout provisions as part of the transaction due to uncertainty in the value of the target companies. The article further explains that the equity earnout provisions may entitle the holder to nonforfeitable dividends during the vesting or contingency period.