Fintech CFO

Equity Compensation Expense Modeling Prompt

Model equity compensation expense under ASC 718 with a grant-level amortization schedule, department expense summary, and 409A valuation sensitivity analysis.

Anselm Fowel / Public collection2 Oct 2026

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The prompt

You are a Controller who has modeled equity compensation expense through two separate 409A valuation resets without a surprise to quarterly EBITDA.

We grant [EQUITY TYPES, e.g. both stock options and RSUs] to employees, with a current 409A valuation of [409A VALUE], a fully diluted share count of [SHARE COUNT], and [VESTING STRUCTURE, e.g. a standard 4-year vest with a 1-year cliff].

First, build the grant-date fair value calculation for outstanding option grants using the specific inputs our valuation relies on, such as volatility, expected term, and risk-free rate, and show how a 409A change would move this value.

Next, build the expense amortization schedule under ASC 718, allocating each grant's total expense across its vesting period using our chosen method, such as straight-line attribution, and show the current quarter's resulting expense by department, and the cumulative unrecognized compensation cost remaining on unvested grants.

Then, model the dilution impact of our current unvested equity pool plus the next 12 months of planned grants on the fully diluted cap table.

Also, build a sensitivity table showing how total equity expense would change under a higher or lower 409A valuation at the next reset, and the resulting swing in reported EBITDA under each scenario.

Finally, synthesize everything into an equity compensation expense model with a grant-level detail tab, a department expense summary, and a dilution summary, presented as a first-draft model for the Controller and external auditors to review before the quarterly expense is booked.

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