ESPR

Will the grant of RSUs to new employees increase the company's compensation expenses in upcoming quarters?

Created August 07, 2025 at 09:30 PM

Short answer: Yes. The 73 500 restricted‑stock units (RSUs) that Esperion granted to 12 new employees will be recognized as compensation expense in the company’s future periods as the units vest. The expense will therefore increase the firm’s compensation‑cost line (and overall operating expense) in the upcoming quarters, although the magnitude of the impact will depend on the vesting schedule and the fair‑value of the RSUs at grant.

Why the RSU grant creates future compensation expense

Accounting principle	How it applies to the RSU grant
ASC 718 (formerly FAS 123R) – Stock‑Based Compensation	When a company issues RSUs, the fair‑value of the award on the grant date is measured (usually using a valuation model such as Black‑Scholes). This amount is then expensed over the period that the employee must provide service to earn the award – i.e., the RSU’s vesting period.
Non‑cash nature	The expense is a non‑cash, equity‑based charge. It does not affect cash flow until the RSUs are ultimately settled (often by delivering shares, which may be funded by a cash‑less “net‑share” settlement).
Impact on the income statement	The expense is recorded under “Compensation and benefits” (or a similar line item) and therefore raises total operating expenses, reducing net income (or earnings per share) for each quarter in which a portion of the RSUs vests.

What the news tells us about the grant

Fact from the release	Implication for expense recognition
Date of grant: August 5 2025	The expense will start to be recognized after this date, as the RSUs begin their vesting period.
Number of RSUs: 73 500	The total equity‑based compensation to be recognized equals the fair‑value of 73 500 RSUs, spread over the vesting term.
Number of employees: 12	The expense will be allocated across 12 individuals, each likely having a similar vesting schedule (e.g., 3‑year graded vesting, cliff vesting, etc.).
Plan: 2017 Inducement Equity Incentive Plan	The plan’s governing documents usually specify the vesting terms (e.g., 25 % per year over four years, or a 3‑year cliff). Those terms will dictate the timing of expense recognition.

Expected timing and size of the expense

Determine the fair‑value per RSU at grant – The press release does not disclose the per‑unit fair‑value, but analysts typically estimate it using the closing market price of ESPR on August 5 2025 and a valuation model.
Apply the vesting schedule – Suppose the RSUs vest equally over a 3‑year period (typical for many start‑up RSU programs). Then each quarter would recognize roughly:

[
\text{Quarterly expense} \approx \frac{\text{Fair‑value per RSU} \times 73{,}500}{12\ \text{quarters}}
]

If the fair‑value were, for example, $2.00 per RSU, the total grant value would be $147,000. Spread over 12 quarters, the quarterly expense would be about $12,250 – a modest addition to compensation costs but still a measurable increase.

Potential acceleration or forfeiture – If any RSUs are subject to performance conditions or early‑termination provisions, the expense could be accelerated (higher expense earlier) or reduced (forfeited RSUs generate no expense). The press release does not mention such conditions, so we assume straight‑line service‑based vesting.

How the expense will appear in upcoming quarters

Income‑statement line	Effect of the RSU grant
Compensation & benefits (or similar)	↑ – incremental expense equal to the portion of the RSU fair‑value that vests in the quarter.
Operating income (EBIT)	↓ – because operating expenses rise.
Net income (or loss)	↓ – after accounting for taxes on the added expense.
Earnings per share (EPS)	↓ – the higher expense reduces earnings, and because RSUs are equity‑based, the diluted share count may also increase (if the RSUs are assumed to be converted into common shares for diluted EPS calculations).
Cash flow from operations	No immediate impact – the expense is non‑cash; cash flow is unchanged until the RSUs are settled (which may be a net‑share settlement that does not require cash outlay).

Relative significance for Esperion

Scale: 73 500 RSUs for 12 employees is a relatively small equity‑compensation program compared with the total shares outstanding of a NASDAQ‑listed company (typically millions of shares). Consequently, the absolute dollar impact on quarterly compensation expense is likely modest.
Trend: If Esperion continues to use RSUs for recruitment and retention, the cumulative effect over the next few years could become a more material line‑item, especially if the company expands headcount or raises the size of future grants.
Investor view: Equity‑based compensation is a standard, non‑cash way to attract talent. Analysts will usually adjust earnings forecasts for the incremental expense, but they will also note that the cash‑flow impact is nil until settlement.

Bottom line

Yes, the grant of 73 500 RSUs to 12 new employees will increase Esperion’s compensation expenses in the quarters during which the RSUs vest.
The expense will be recognized gradually (most commonly on a straight‑line basis) over the vesting period, reflecting the service the employees provide.
While the cash‑flow impact is deferred (or absent) until the RSUs are settled, the income‑statement impact will reduce operating profit and net income and therefore lower EPS for the affected quarters.
Given the modest size of the grant relative to the company’s overall equity base, the near‑term quantitative effect is likely small, but it will still be a visible line‑item increase in compensation costs.

Takeaway for stakeholders: When modeling Esperion’s upcoming quarterly results, add a non‑cash compensation expense line that reflects the portion of the 73 500 RSU grant that vests each quarter. The exact dollar amount depends on the RSU fair‑value at grant and the specific vesting schedule, but the direction of the impact is unequivocally upward on compensation expense.