Fundraising Operations
Reconcile an Employee Equity Statement to Award Records
Check a recipient’s equity statement with separate roll-forwards for option rights and issued shares.
What you will learn
- Define the unit and period before reconciling an equity statement.
- Keep outstanding options, vested rights and issued shares separate.
- Explain a difference with evidence rather than silently changing a record.
Reconcile an employee equity statement by matching each unit type to its source records and movements. Do not add option rights, vested quantities and issued shares into one ownership total. A clean reconciliation explains what changed during a defined period and which questions remain unresolved.
Define what each balance counts
Outstanding options are rights still outstanding under their terms. Vested options are a subset of those rights, not extra units to add again. Issued shares are a different record. A new statement may show several of these quantities correctly, but the labels must be understood before the totals are compared.
A historical filed equity plan illustrates the distinction between options, exercise and issued shares. The actual instrument terms and records, not that historical example, determine the recipient’s position.
Work a two-unit reconciliation
Fictional period: opening outstanding options are 10,000. An additional 2,000 are granted, 1,500 are exercised and 500 are cancelled. Assume every movement has been confirmed in the relevant source records.
Original recipient reconciliation worksheet
| Unit and movement | Calculation | Closing result |
|---|---|---|
| Outstanding option rights | 10,000 + 2,000 − 1,500 − 500 | 10,000 options |
| Vested portion of closing options | Supplied closing status | 3,500 vested options |
| Unvested portion of closing options | 10,000 − 3,500 | 6,500 unvested options |
| Issued shares held | 200 opening + 1,500 issued on exercise − 400 sold | 1,300 shares held |
The 3,500 and 6,500 sum to the 10,000 outstanding options. They are not additional holdings. The 1,500 exercise appears in both ledgers because option rights leave one state and issued shares enter another. The supplied sale is a completed fictional transaction, not a finding that any real transfer is permitted.
Attach a source to each movement
Use a source-reference column for grant documentation, completed exercise records, cancellation records, settlement evidence and confirmed transfers as applicable. Distinguish the transaction date from the date someone entered it into a system.
The IRS nonbinding audit guide identifies plans, agreements and related records as evidence. It does not make a portal screenshot authoritative or establish the treatment of a particular discrepancy.
If the dates or units differ between records, leave a visible exception. A zero difference produced by combining unlike units is not a successful reconciliation.
Reconcile the state, not just the arithmetic
- Period: Are opening and closing dates consistent?
- Unit: Are both records counting the same instrument and class?
- Movement: Is the transaction completed or only requested?
- Subset: Is a vested amount already included in the outstanding total?
- Source: Which record supports the amount and its status?
- Exception: Who owns the unresolved difference?
Do not use this recipient worksheet to rewrite the company’s cap table, calculate stock-compensation expense or decide the validity of an award.
Exercise: vesting without an exercise
After the closing balance above, 800 of the unvested options vest. There are no new grants, cancellations or exercises. What happens?
Answer: Outstanding options stay at 10,000. Vested options increase to 4,300 and unvested options fall to 5,700. Issued shares remain 1,300. Vesting changed the status of existing rights; it did not add another 800 option rights or automatically issue shares.
Leave a traceable recipient readout
The cap-table checklist covers broader company records. This worksheet owns the narrower task of reconciling one recipient’s quantities and states.
Keep the permitted source packet, completed worksheet and unresolved questions together in Finta Documents. A useful final readout states the period, unit definitions, verified movements and open differences without pretending a matching sum resolves every legal or tax question.
General education with fictional examples, not individualized legal, tax, valuation or investment advice. Have the appropriate professional review decisions affecting actual awards or transactions.