Underwater Options Analyzer
How much of the option pool is underwater, and how deep.
Your stock administration platform exports options outstanding. This tool turns it into the audit view you need before any plan amendment, refresh decision, or repricing conversation: percent underwater by shares and holders, intrinsic and spread value, depth bands, tranches by year and strike, vested vs unvested exposure, and a memo for TR, finance, accounting, legal, and the comp committee.
Deterministic intrinsic-value math. No AI in the audit path. Client- side only. The analyzer reports the math; it does not recommend repricing.
How to use this in a plan-amendment / refresh discussion
Step 1
Pull options outstanding
Export options outstanding (ISO + NSO + SAR) from Fidelity / Shareworks / Computershare / E*TRADE / Carta. Optionally join level / function / country from Workday / SuccessFactors / Oracle HCM / Dayforce / UKG.
Step 2
Set the FMV reference
Use the most recent 409A (private) or trading-day close (public). Update the as-of date to match. Decide whether to include or exclude expired grants.
Step 3
Read the headline
What share of outstanding option shares is underwater? What share of holders has at least one underwater grant? How does the depth distribution look across slightly / moderately / deeply / severely underwater bands?
Step 4
Walk tranches and levels
Identify which grant year + strike combos are concentrated underwater. Identify which levels are most exposed. Compare to the company refresh framework and dilution model.
Step 5
Hand off
TR leadership → finance (burn-rate / overhang reconciliation) → accounting (ASC 718 modification expense) → legal (plan terms, ISS / Glass Lewis posture, listing rules) → comp committee.
What this tool is, and what it isn’t
Intrinsic value only
Spread = max(0, FMV − strike) × shares outstanding. This is the same intrinsic-value math your stock administration platform reports as 'in the money' value. It is not a Black-Scholes / ASC 718 fair-value engine.
Not a recommendation
The analyzer reports the math. Repricing, option exchange, accelerated vesting, and plan amendments are governed by plan terms, ISS / Glass Lewis frameworks, listing rules, shareholder approval, and qualified counsel. The right next decision is usually 'monitor next quarter,' not a remediation.
Client-side only
Your CSV is parsed in your browser. The data lives in this tab's memory for the session and is gone the moment the tab closes. Nothing is uploaded.
ISO mechanics
ISO holders face different tax mechanics on exercise (AMT bargain-element exposure). Repricing or exchange of ISOs typically converts them to NSOs and triggers a fresh ISO 100k limit clock. Confirm with tax / legal before any modification.
Settings
Defaults a TR practitioner would set once at the start of the audit.
Where to find thisCurrent FMV: most recent 409A valuation (private) or trading-day reference (public). Per-row FMV override is honored where supplied. Depth bands: defaults follow the practitioner-common 95% / 75% / 50% / 25% strike-of-FMV cuts; adjust to TR policy. Excluding expired grants is the default; toggle off when auditing a remediation cycle that may include re-issued vested-but-expired awards.
Option grants
Manual entry or paste/upload an options outstanding worksheet.
Where to find thisStrike, Award Type, Grant Date, Expiration Date, Shares Granted/Vested/Exercised/Forfeited: Fidelity / Shareworks (Morgan Stanley) / Computershare / E*TRADE / Carta options outstanding export. Level, Function, Country: Workday / SAP SuccessFactors / Oracle HCM / Dayforce / UKG. Required column: Strike.
Or paste CSV inline
| ID / Name | Level | Award | Grant date | Expires | Strike | Granted | Vested | Exercised | Forfeited | |
|---|---|---|---|---|---|---|---|---|---|---|
Headline exposure
Underwater (shares)
51.2%
Underwater (holders)
75.0%
Underwater shares
28,300
Total in-scope shares
55,300
Total spread (intrinsic)
$795,000
ITM-only intrinsic
$795,000
Holders in scope
12
Underwater holders
9
Vested vs unvested underwater exposure
Vested underwater shares
12,200
Unvested underwater shares
16,100
Underwater ISO
8,500
Underwater NSO
17,800
Underwater SAR
2,000
Depth bands
| Band | FMV/strike range | Grants | Holders | Shares |
|---|---|---|---|---|
| Slightly underwater | 0.95–1.00 | 1 | 1 | 3,000 |
| Moderately underwater | 0.75–0.95 | 3 | 3 | 6,500 |
| Deeply underwater | 0.50–0.75 | 2 | 2 | 11,000 |
| Severely underwater | 0.25–0.50 | 2 | 2 | 3,800 |
| Extremely underwater | 0.00–0.25 | 1 | 1 | 4,000 |
Tranches and trends
By grant year
| Year | Grants | Shares | Underwater | % UW |
|---|---|---|---|---|
| 2018 | 1 | 15,000 | 0 | 0.0% |
| 2021 | 1 | 8,000 | 0 | 0.0% |
| 2022 | 3 | 15,000 | 11,000 | 73.3% |
| 2023 | 4 | 9,500 | 9,500 | 100.0% |
| 2024 | 3 | 7,800 | 7,800 | 100.0% |
By level (sorted by % underwater)
| Level | Holders | UW shares | Total | % UW |
|---|---|---|---|---|
| L5 | 2 | 4,500 | 4,500 | 100.0% |
| L6 | 5 | 8,800 | 12,800 | 68.8% |
| L7 | 4 | 15,000 | 23,000 | 65.2% |
| L8 | 1 | 0 | 15,000 | 0.0% |
Tranches (year × strike, first 30)
| Tranche | Grants | Shares | Spread $ |
|---|---|---|---|
| 2018 @ $5 | 1 | 15,000 | $675,000 |
| 2021 @ $35 | 1 | 8,000 | $120,000 |
| 2022 @ $50 | 1 | 4,000 | $0 |
| 2022 @ $80 | 2 | 11,000 | $0 |
| 2023 @ $52 | 1 | 3,000 | $0 |
| 2023 @ $60 | 1 | 2,000 | $0 |
| 2023 @ $65 | 2 | 4,500 | $0 |
| 2024 @ $200 | 2 | 3,800 | $0 |
| 2024 @ $250 | 1 | 4,000 | $0 |
Per-grant detail
First 50 rows shown. Use the results CSV for the full set.
| ID | Status | Strike | FMV/Strike | Outstanding | Spread $ | Flags |
|---|---|---|---|---|---|---|
| E1001 | In the money | $5 | 10.00 | 15,000 | $675,000 | |
| E1002 | In the money | $35 | 1.43 | 8,000 | $120,000 | |
| E1003 | At the money | $50 | 1.00 | 4,000 | — | |
| E1004 | Underwater· Slightly underwater | $52 | 0.96 | 3,000 | — | |
| E1005 | Underwater· Moderately underwater | $65 | 0.77 | 2,500 | — | |
| E1006 | Underwater· Moderately underwater | $65 | 0.77 | 2,000 | — | |
| E1007 | Underwater· Deeply underwater | $80 | 0.63 | 6,000 | — | |
| E1008 | Underwater· Deeply underwater | $80 | 0.63 | 5,000 | — | |
| E1009 | Underwater· Severely underwater | $200 | 0.25 | 2,000 | — | |
| E1010 | Underwater· Severely underwater | $200 | 0.25 | 1,800 | — | |
| E1011 | Underwater· Extremely underwater | $250 | 0.20 | 4,000 | — | |
| E1012 | Excluded | $20 | — | 500 | — | Expired grant |
| E1013 | Underwater· Moderately underwater | $60 | 0.83 | 2,000 | — | |
| E2001 | Excluded | — | — | 1,000 | — | Missing strike |
| E2002 | Excluded | $50 | — | 0 | — | Zero outstanding shares |
Exceptions
Counts by type, sorted by volume.
Missing strike
1
Zero outstanding shares
1
Expired grant
1
Needs manual review
1
Audit memo
Plain markdown. Drop into your audit pre-read or comp-committee packet.
# Underwater options exposure — planning memo Educational diagnostic prepared from typed inputs. Not legal, tax, accounting, financial, or compensation advice. The company plan document, ISS / Glass Lewis frameworks, shareholder approval requirements, and qualified counsel control any decision to reprice, exchange, or otherwise modify outstanding awards. Bring this memo to TR leadership, finance, accounting, legal, and the comp committee for review before any action. Spread is the *intrinsic* value of an option (max(0, FMV − strike) × shares outstanding). It is not a Black-Scholes / ASC 718 fair value. The analyzer reports the math; it does not recommend repricing. ## 1. Inputs and assumptions - Current FMV: $50 per share. - As-of date: 2026-05-08. - Expired grants: excluded from analysis. - Depth bands (FMV/strike ratio, half-open intervals): Slightly underwater [0.95, 1.00), Moderately underwater [0.75, 0.95), Deeply underwater [0.50, 0.75), Severely underwater [0.25, 0.50), Extremely underwater [0.00, 0.25). ## 2. Headline exposure - **51.2%** of outstanding option shares are underwater (28,300 of 55,300). - **75.0%** of holders have at least one underwater grant (9 of 12). - Aggregate spread value across in-scope grants: $795,000 (in-the-money intrinsic only: $795,000). ## 3. Vested vs unvested underwater exposure - Underwater vested shares: 12,200 (immediately exercisable, currently with no spread). - Underwater unvested shares: 16,100 (still time to recover before vest). ## 4. Underwater by award type - ISO: 8,500 shares - NSO: 17,800 shares - SAR: 2,000 shares ISO note: ISO holders face different tax mechanics on exercise (AMT exposure on bargain element). Repricing or exchange of ISOs typically converts them to NSOs and triggers a fresh ISO 100k limit clock; confirm with tax / legal before any modification. ## 5. Depth bands - **Slightly underwater** (FMV/strike 0.95–1.00): 1 grants · 1 holders · 3,000 shares - **Moderately underwater** (FMV/strike 0.75–0.95): 3 grants · 3 holders · 6,500 shares - **Deeply underwater** (FMV/strike 0.50–0.75): 2 grants · 2 holders · 11,000 shares - **Severely underwater** (FMV/strike 0.25–0.50): 2 grants · 2 holders · 3,800 shares - **Extremely underwater** (FMV/strike 0.00–0.25): 1 grants · 1 holders · 4,000 shares ## 6. By grant year - 2018: 1 grants · 15,000 shares · 0 underwater (0.0%) - 2021: 1 grants · 8,000 shares · 0 underwater (0.0%) - 2022: 3 grants · 15,000 shares · 11,000 underwater (73.3%) - 2023: 4 grants · 9,500 shares · 9,500 underwater (100.0%) - 2024: 3 grants · 7,800 shares · 7,800 underwater (100.0%) ## 7. By level (sorted by % underwater) - L5 — 2 holders · 4,500 of 4,500 shares underwater (100.0%) - L6 — 5 holders · 8,800 of 12,800 shares underwater (68.8%) - L7 — 4 holders · 15,000 of 23,000 shares underwater (65.2%) - L8 — 1 holders · 0 of 15,000 shares underwater (0.0%) ## 8. Tranches (grant year × strike) - 2018 @ $5 — 1 grants · 15,000 shares · spread value $675,000 - 2021 @ $35 — 1 grants · 8,000 shares · spread value $120,000 - 2022 @ $50 — 1 grants · 4,000 shares · spread value $0 - 2022 @ $80 — 2 grants · 11,000 shares · spread value $0 - 2023 @ $52 — 1 grants · 3,000 shares · spread value $0 - 2023 @ $60 — 1 grants · 2,000 shares · spread value $0 - 2023 @ $65 — 2 grants · 4,500 shares · spread value $0 - 2024 @ $200 — 2 grants · 3,800 shares · spread value $0 - 2024 @ $250 — 1 grants · 4,000 shares · spread value $0 ## 9. Exceptions - Missing strike: 1 - Zero outstanding shares: 1 - Expired grant: 1 - Needs manual review: 1 ## 10. Recommended next steps 1. **TR leadership.** Walk the depth-band and by-level views against the company's grant philosophy. Identify cohorts most exposed to retention risk from prolonged underwater positions. 2. **Finance.** Reconcile in-scope shares against the burn-rate / overhang model (Stock Plan Health Check pairs naturally here). Confirm the FMV reference point against the latest 409A or trading-day close. 3. **Accounting.** Any modification (repricing, option exchange, accelerated vesting) is a Type III modification under ASC 718 and triggers incremental fair-value expense. Engage the controller before scoping a remediation. 4. **Legal + governance.** Repricings without shareholder approval are restricted by most plan documents and viewed unfavorably by ISS / Glass Lewis. Confirm plan terms, listing-rule requirements (NYSE / Nasdaq), and any standing comp-committee charter language. 5. **Comp committee.** Package this memo with the burn-rate / overhang context (Stock Plan Health Check) and the refresh sizing memo. The right next decision is usually 'do nothing yet, monitor next quarter,' a one-time refresh tilt, or a deliberate plan-amendment cycle. The analyzer surfaces the math; the committee decides. ## Disclaimer Outputs reflect the inputs and settings typed above. This is intrinsic-value analysis only; it is not a Black-Scholes / ASC 718 fair-value engine and it is not a recommendation to reprice, exchange, or otherwise modify outstanding awards. Real decisions are governed by the company plan document, ISS / Glass Lewis frameworks, shareholder-approval requirements, listing-rule restrictions, and qualified counsel.
Educational diagnostic. Intrinsic-value analysis only. Not legal, tax, accounting, financial, or compensation advice. Not a recommendation to reprice, exchange, or otherwise modify outstanding awards. Real decisions are governed by the company plan document, ISS / Glass Lewis frameworks, shareholder-approval requirements, listing-rule restrictions, and qualified counsel.