Facts on SPACs: Compensation arrangements

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Special-purpose acquisition companies (SPACs) have been around for some time, but in the last 24 months there have been an unprecedented number of companies going public via a SPAC transaction. In our Facts on SPACs mini-series, we cut through the noise to help you focus on some of the key issues relating to these transactions. 

In episode four of our six-part series on SPACs, Jay Seliber, PwC National Office partner, is back again. This time he’s explaining how to apply compensation guidance to certain arrangements common in a SPAC transaction.

Topics include:

• 1:08 - Identification. Jay explains how to identify instruments subject to the compensation guidance and the most common instruments used as compensation in SPAC transactions. 
• 15:23 - What to look out for. Jay highlights pitfalls he’s seen in past SPAC deals and how to plan ahead to avoid them. 
• 18:18 - EPS. Jay shares how earnouts and warrants impact EPS when they’ve been determined to be compensatory and not financial instruments. 
• 21:18 - Key takeaways. Jay shares where to find more information and gives some parting advice to companies on navigating SPAC transactions.

Want to learn more? Read our Stock-based compensation and Financial statement presentation guides. And listen to our podcast, Stock-based compensation issues in an IPO and SPAC, explained.

Jay Seliber is a partner in PwC’s National Office. He leverages over 30 years of experience to help clients with their most complex accounting matters, particularly in the areas of mergers and acquisitions, revenue recognition, stock compensation, earnings per share, employee benefits, restructurings, impairments, and financing transactions. Jay is presently PwC's representative to the FASB's Emerging Issues Task Force.

Heather Horn is PwC’s National Office thought leader, responsible for developing our communications strategy and conveying firm positions on accounting and financial reporting matters. She is the engaging host of PwC’s accounting and reporting weekly podcast and quarterly webcast series, as well as periodic webcasts for the power and utilities industry. With nearly 30 years of experience, Heather’s accounting and auditing expertise includes financial instruments and rate-regulated accounting.

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