Shareholder Value Transfer - SVT

AAA

DEFINITION of 'Shareholder Value Transfer - SVT'

A metric intended to guide shareholders in how much equity compensation should be awarded for employees and executives of publicly traded companies. Shareholder Value Transfer is calculated as the total value of equity grants divided by the market capitalization of the company. This yields a percentage to which existing shareholders would be diluted under a given equity compensation plan.

INVESTOPEDIA EXPLAINS 'Shareholder Value Transfer - SVT'

The Shareholder Value Transfer metric was created by Institutional Shareholder Services (ISS), a research firm that advises shareholders on how to vote on shareholder proposals. ISS calculates shareholder value transfer for the top companies within each industry and decides on a maximum "cap" amount that any company should have to pay in shareholder value transfer, in order to perform well. ISS then typically advises investors to vote against any equity compensation proposal that would exceed the shareholder value transfer cap.

RELATED TERMS
  1. Employee Stock Option - ESO

    A stock option granted to specified employees of a company. ESOs ...
  2. Shareholders' Equity

    A firm's total assets minus its total liabilities. Equivalently, ...
  3. Strike Price

    The price at which a specific derivative contract can be exercised. ...
  4. Exchange Traded Derivative

    A financial instrument whose value is based on the value of another ...
  5. Value Of Risk (VOR)

    The financial benefit that a risk-taking activity will bring ...
  6. Business Judgment Rule

    A legal principle which grants directors, officers, and agents ...
RELATED FAQS
  1. What impact did the Sarbanes-Oxley Act have on corporate governance in the United ...

    After a prolonged period of corporate scandals involving large public companies from 2000 to 2002, the Sarbanes-Oxley Act ... Read Full Answer >>
  2. What does it mean to be long or short a derivative?

    A derivative is a type of security in which the price of the security is dependent on one or more underlying assets. A derivative ... Read Full Answer >>
  3. What is an over-the-counter derivative?

    A derivative is a type of security in which the price of the security depends on the price of the underlying asset. Depending ... Read Full Answer >>
  4. What does the underlying of a derivative refer to?

    A derivative security is a financial instrument in which the price of the derivative is dependent on its underlying asset. ... Read Full Answer >>
  5. What kinds of derivatives are types of contingent claims?

    A contingent claim is another term for a derivative with a payout that is dependent on the realization of some uncertain ... Read Full Answer >>
  6. What does it mean to take delivery of a derivative contract?

    When trading derivative contracts for options, a buyer or holder may have to take delivery of the underlying asset if the ... Read Full Answer >>
Related Articles
  1. Options & Futures

    A New Approach To Equity Compensation

    The new financial accounting standard known as FAS 123R could take a bite out of your portfolio. Find out why here.
  2. Investing

    Mergers Put Money In Shareholders' Pockets

    Learn the five ways mergers and acquisitions can increase a company's value.
  3. Professionals

    Understanding Series 6

    Upon successful completion of the Series 6, an individual will have the qualifications needed to sell open end mutual funds and variable annuities
  4. Mutual Funds & ETFs

    How To Invest In The Swiss Franc

    The Swiss franc is one of the safe havens of the investing world. Learn how invest through ETFs, forex, futures, and binary options.
  5. Investing

    The Strong Dollar’s (Real) Toll On Tech Stocks

    A large portion of U.S. technology companies’ sales occur overseas, given the strong international business and consumer demand from many U.S. tech firms.
  6. Stock Analysis

    Google Stock: A Tale of Two Share Classes

    Google stock comes in two different flavors with different rights for shareholders.
  7. Economics

    What is a Business Model?

    Business model is the term for a company’s plan as to how it will earn revenue.
  8. Investing

    What More Volatility Means For Momentum Stocks

    One byproduct of the recent tick higher in bond yields: a meaningful rise in volatility for both stocks and bonds.
  9. Options & Futures

    How & Why Interest Rates Affect Options

    The Fed is expected to change interest rates soon. We explain how a change in interest rates impacts option valuations.
  10. Investing Basics

    Understanding Notional Value

    This term is commonly used in the options, futures and currency markets because a very small amount of invested money can control a large position.

You May Also Like

Hot Definitions
  1. Fracking

    A slang term for hydraulic fracturing. Fracking refers to the procedure of creating fractures in rocks and rock formations ...
  2. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  3. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  4. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  5. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  6. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
Trading Center