How does Dollar Rent A Car account for restricted stock unit (RSU) awards?
Dollar_Rent_A_Car Franchise · 2025 FDDAnswer from 2025 FDD Document
ed on the grant date fair value of the award. That cost is to be recognized over the period during which the employee is required to provide service in exchange for the award. Forfeitures are accounted for when they occur. The Company has estimated the fair value of options issued at the date of grant using a Black-Scholes option-
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
pricing model, which includes assumptions related to volatility, expected term, dividend yield and risk-free interest rate.
The Company accounts for restricted stock unit ("RSU") and performance stock unit ("PSU") awards when granted as equity classified awards.
Source: Item 23 — RECEIPTS (FDD pages 102–301)
What This Means (2025 FDD)
According to Dollar Rent A Car's 2025 Franchise Disclosure Document, the company accounts for restricted stock units (RSUs) when granted as equity classified awards. The expense for RSUs is based on the grant-date fair value of the stock and the number of shares that vest. This expense is recognized over the service period.
Compensation expense for RSUs is based on the grant date fair value, and is recognized ratably over the vesting period. RSU grants issued in 2024 vest ratably over a period of primarily three years. Restricted stock and RSUs granted under the 2021 Omnibus Plan vest based on a minimum period of service or the occurrence of events specified by the Compensation Committee or Board. Restricted stock and RSUs are subject to forfeiture until vested.
For a potential Dollar Rent A Car franchisee, understanding how the company accounts for RSUs might not have a direct impact on their day-to-day operations. However, it provides insight into the company's financial practices and how they compensate employees or executives with stock-based awards. This can be useful for assessing the overall financial health and stability of the company.
It is important to note that the specifics of RSU grants, such as vesting schedules and performance conditions, are determined by the Compensation Committee or Board. Prospective franchisees may want to inquire about the details of these grants to gain a better understanding of the company's compensation practices.