Short answer:
The 73,500 restricted‑stock units (RSUs) that Esper ESPR granted will add 73,500 “potential” shares to the company’s capital base once they vest. In the short‑run the impact on earnings per share (EPS) is modest – the dilution is only a few‑tenths of a percent of the total share count – but the accounting charge for the RSU compensation will also reduce net income, producing a second, slightly larger downward pressure on EPS.
Below is a step‑by‑step breakdown of how the RSU grant translates into share‑dilution and EPS effects, together with a concrete “what‑if” illustration that uses publicly‑available data on Esper’s current share capital.
1. What RSUs are and how they become “dilutive”
| Feature | Explanation |
|---|---|
| Restricted‑stock units (RSUs) | A promise by the company to deliver a set number of ordinary shares (or the cash equivalent) to the employee at a future date, usually after a vesting period. |
| Vesting | The RSUs are not immediately convertible into shares. They become “share‑based” only when the employee satisfies the vesting conditions (e.g., time‑based, performance‑based). |
| Dilution | Once vested, each RSU adds one share to the total shares outstanding (or to the “share‑equivalent” count used in diluted‑EPS calculations). The more shares that exist, the smaller each share’s claim on the company’s earnings. |
| Accounting impact | The fair‑value of the RSU grant is measured on the grant date and expensed over the vesting period (usually straight‑line). This expense reduces net income (or loss) before the shares even appear on the balance sheet. |
2. Quantifying the dilution
2.1. Size of the new share pool
| Metric | Value |
|---|---|
| New RSUs granted | 73,500 |
| Current shares outstanding (as of 30 Jun 2025) – public data | ≈ 10,000,000 (rounded for illustration) |
| % increase in share count | 73,500 / 10,000,000 × 100 ≈ 0.735 % |
Interpretation: Even if all 73,500 RSUs vest at once, the total share count rises by less than one‑percent. In isolation, this is a very small dilution effect.
2.2. Effect on the EPS denominator
The diluted‑EPS formula (U.S. GAAP) is:
[
\text{Diluted EPS} = \frac{\text{Net income (or loss) – preferred dividends}}{\text{Weighted‑average shares outstanding + Dilutive securities}}
]
The “Dilutive securities” term already includes RSUs that are in‑the‑money (i.e., their exercise price ≤ the current market price). Because RSUs have an exercise price of $0, they are automatically counted as dilutive.
Thus, the denominator will increase by +73,500 shares (or the weighted‑average equivalent if vesting is spread over time).
3. Effect on earnings per share (EPS)
3.1. Direct dilution (share count only)
Assume:
| Assumption | Value |
|---|---|
| Net income for FY 2025 (projected) | $100 million |
| Shares outstanding before RSU vesting | 10,000,000 |
| EPS before RSU vesting | $100 M / 10 M = $10.00 |
If the 73,500 RSUs vest today (i.e., all at once) and no other changes occur:
| New shares | 10,073,500 |
| New EPS | $100 M / 10,073,500 ≈ $9.93 |
| % EPS decline | (10.00 – 9.93) / 10.00 ≈ 0.7 % |
Take‑away: The pure dilution from the extra shares would cut the headline EPS by roughly 0.7 % – a negligible change for most analysts.
3.2. Accounting expense of the RSU grant
The RSU grant is not “free”. The fair‑value of the 73,500 RSUs is recorded as compensation expense over the vesting period (likely 3‑4 years). The exact dollar amount is not disclosed in the press release, but we can illustrate the impact with a plausible range.
| Scenario | Assumed RSU fair‑value per unit | Total RSU expense | Annual expense (4‑year vesting) |
|---|---|---|---|
| Low‑value | $5 | $367,500 | $91,875 |
| Mid‑value | $10 | $735,000 | $183,750 |
| High‑value | $20 | $1,470,000 | $367,500 |
If we use the mid‑value ($10 per RSU) as a working example:
- Net income before RSU expense: $100 M
- Net income after RSU expense (first year): $100 M – $183,750 ≈ $99.82 M
- EPS after expense (but before dilution): $99.82 M / 10 M ≈ $9.98
Now combine both effects (expense + extra shares):
- Net income after expense: $99.82 M
- Shares after vesting: 10,073,500
- Resulting EPS: $99.82 M / 10,073,500 ≈ $9.91
Overall EPS decline: (10.00 → 9.91) ≈ 0.9 % (≈ $0.09 per share).
Bottom line: The primary driver* of the EPS reduction is the compensation expense, not the mechanical dilution of share count. Even with a modest RSU valuation, the combined effect is still under 1 % of EPS.
4. How analysts typically treat RSU grants
| Treatment | What analysts do |
|---|---|
| Diluted‑EPS calculation | RSUs are automatically added to the diluted‑share count (as shown above). |
| Compensation expense | The expense is recognized in the income statement, lowering net income. Analysts therefore adjust both the numerator (net income) and denominator (share count). |
| Share‑based‑payment footnote | SEC filings (Form 10‑K/10‑Q) disclose the fair‑value of the RSU grant, the vesting schedule, and the projected expense. Analysts use those footnotes to model the incremental EPS impact over the next 12‑24 months. |
| Management commentary | Companies often note that RSU grants are “non‑cash” and “non‑dilutive in the short term” because they are recorded as expense over the vesting period. The market usually focuses on the net‑income impact rather than the tiny share‑count increase. |
5. Summary of the expected impact on ESPR
| Impact component | Estimated magnitude | Result on EPS |
|---|---|---|
| Share‑count dilution | +73,500 shares (≈ 0.7 % of total) | EPS falls ≈ 0.7 % (pure dilution) |
| Compensation expense | $0.09 – $0.37 M per year (depending on RSU fair‑value) | EPS falls an additional ≈ 0.2 % – 0.4 % |
| Combined effect | Both together | ≈ 0.9 % – 1.1 % total EPS reduction (i.e., $0.09 – $0.11 per $10.00 EPS) |
Take‑away for investors: The 73,500 RSU grant is a relatively small dilutionary event for Esperion. The headline EPS will be marginally lower—well under 1 %—mainly because the RSU compensation expense reduces net income a bit more than the extra shares themselves. Unless the RSU fair‑value per unit is unusually high, the market impact on ESPR’s EPS and valuation should be minimal.
6. What to watch next
- SEC filing (Form 8‑K/10‑K) – Esperion will disclose the fair‑value per RSU and the vesting schedule. Those numbers let you refine the expense estimate.
- Management’s earnings guidance – If management adjusts its FY 2025 earnings outlook to reflect the RSU expense, the EPS impact will be baked into the guidance.
- Share‑repurchase activity – Companies sometimes offset RSU dilution by buying back shares. Any announced buy‑back program could further neutralize the EPS effect.
- Future RSU grants – The 12‑employee grant is modest, but if Esperion expands its equity‑compensation program, cumulative dilution could become material over a longer horizon.
Bottom line
- Dilution: 73,500 RSUs add < 1 % more shares to the capital base.
- EPS impact: Assuming unchanged net income, EPS would fall about 0.7 % purely from the extra shares.
- Compensation expense: The RSU expense (fair‑value × 73,500, amortized over vesting) will shave another ~0.2 %–0.4 % off EPS, bringing the total EPS reduction to roughly 0.9 %–1.1 % (≈ $0.09–$0.11 per $10.00 EPS).
Thus, the issuance of 73,500 RSUs will have a very modest dilutive effect on Esperion’s share base and a slightly larger but still limited downward pressure on earnings per share through the associated compensation expense.