ServiceNow Stock Split Eases Employee Compensation

about 1 month ago

Kasey

"Actually, in practical terms, this is oftentimes why a company splits its stock when your stock price is somewhere in the ballpark of a thousand dollars per share, it may get tricky trying to award employees with stock awards. Maybe the employee hasn't earned a thousand dollars worth of stock, so do you issue partial shares? Or options on partial shares? Well, it might be easier if you just had a smaller stock price, so post split ServiceNow will be less than 200 bucks a share, making the employee stock-based compensation much easier to manage."

The commentary explains that ServiceNow's high stock price complicates employee stock awards, and by splitting the stock to below $200 per share, the company simplifies its compensation process. The segment highlights the rationale behind the split amid steady revenue growth and operational partnerships.

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