Grant Date Fair Value

Grant date fair value is the dollar value a company assigns to an equity award on the day it is granted, calculated under the accounting standard ASC 718, and it is the figure reported in the Summary Compensation Table’s stock and option award columns. Those two columns feed directly into the table’s Total column, which is why the grant-date value of an executive’s equity is the equity amount most often quoted in coverage of executive pay.

How the figure is computed depends on the instrument. For a time-based restricted stock unit it is generally the number of units granted multiplied by the stock price on the grant date, with no modeling required. For a stock option it requires an options-pricing model, typically Black-Scholes or a binomial model, that estimates value from the stock’s volatility, the option’s expected term, the dividend yield, and a risk-free rate. For a performance stock unit it may add a probability estimate of whether the performance condition will be met, often using a Monte Carlo simulation when the metric is relative total shareholder return.

The figure is fixed at the moment of grant and does not update afterward. It is not what the award is worth today, and not what it will be worth when it vests. A reader tracking what an award actually turned out to be worth needs a different figure from a different table, because the grant-date value answers only what the award was estimated to be worth on the day it was granted.

Grant date fair value is also the basis for the accounting expense a company recognizes for the award, but the expense is spread across the period the award requires the employee to serve, not recorded all at once at grant. That is why a single large grant can appear at full value in the Summary Compensation Table in one year while its cost to the company is recognized across several years of financial statements.

What the figure deliberately does not capture is anything that happens after the grant date: the stock’s later movement, the number of shares actually delivered at vesting, dividends, or whether a performance condition was ultimately met. A grant valued at target can go on to deliver more or less than that value, and the grant-date figure will still read the same. That gap between grant-date value and realized value is the reason a separate disclosure, Compensation Actually Paid, exists alongside the Summary Compensation Table.

The same grant-date value appears in more than one place in the proxy, so a reader can cross-check it. The Grants of Plan-Based Awards table lists each individual grant with its grant date, share count, and the same grant-date fair value shown in the Summary Compensation Table. The footnotes to that table set out the valuation assumptions behind the number, particularly the model inputs used for options and performance awards, which is where a reader can see how much of the figure rests on an estimate.

The figure is standardized in a way that makes company-to-company comparison possible, since every company reports its awards on the same accounting basis. It is still not a measure of pay actually received, and a company’s own Compensation Discussion and Analysis will often present a different, realizable view of the same awards by marking them to a later stock price. Reading grant date fair value as the value the executive received is the single most common way the number is misused.

The $20,308,799 grant-date fair value Marvell reports for Sandeep Bharathi's July 15, 2025 PSU award is an accounting estimate made the day of grant — not a promise of what the award will ultimately be worth when it vests.