Equity shares explain how ownership is recorded in the Waterdeep Trading Company. Stock-based compensation extends this structure by granting workers who guide the company each season a future claim to ownership. Greta Ironfist uses these awards to reward commitment, attract skilled treasurers, and maintain stable long-term plans.
This follow-up article explains how these awards work, how they connect to the existing equity accounts, and how the ledger captures the cost of service through clear accruals.
What Stock-Based Compensation Represents
A stock-based award grants a worker the right to receive shares at a later date. Some vest with time. Some require completing a trade route or a season of substantial surplus. All create an obligation for the company. As the worker provides service, a portion of that award becomes earned. This earned portion is recognized as an expense.
Because these awards settle in shares rather than coins, the accounting flows through equity. The Waterdeep Mercantile League provides fair value scrolls to help treasurers measure each grant at the moment it is offered.
Why These Awards Matter
Workers who hold a chance at future ownership feel a stronger bond to the company. They take care of the ledgers, caravans, and contracts as if they already have a place in the long history of the guild. Stock-based compensation supports worker retention and encourages a stable culture across the company.
For the ledger, these awards must be handled with precision. The service cost must be recognized each season. The equity obligation must be increased over the vesting period. When the award vests, the reserve converts into the appropriate share class.
Equity Accounts Used for Stock-Based Awards
Stock-based compensation builds on the existing share accounts. Two new reserve accounts are added to track the accrual during the vesting period.
This table shows the core accounts used when awards are granted, accrued, and vested.
These accounts integrate fully with the chart of accounts used in the prior article.
How the Company Measures Fair Value
At the grant date, the arcane treasurers rely on Waterdeep Mercantile League valuation scrolls. These scrolls consider guild reputation, seasonal surplus, trade route strength, supply conditions, and historical demand for company shares. This value becomes fixed for accounting purposes and does not change with later events.
The fair value is then spread evenly across the vesting period, unless service terms require a different pattern.
Worked Example: Four-Year Vesting Award
A senior archivist is awarded a fair value of 2,400.00 FSD. The award lasts for over four years.
Annual expense equals 2,400.00 divided by 4. This is 600.00 FSD per year.
Below is the progression of expense and reserve growth.
Journal Entries During the Vesting Period
The following entries repeat each year until vesting is complete.
This records the cost of service and increases the equity obligation.
Journal Entry Upon Vesting
When the award vests, the reserve is transferred to the appropriate equity account.
If the award settles into common shares:
If the nominal share value is less than the award value, a portion may be posted to Share Premium instead.
Special Faerûn Notes
Some provinces classify stock-based awards as guild benefits and require scroll filings before vesting. The Scriveners’, Scribes’, and Clerks’ Guild must seal the grant scroll for the award to be recognized. Magical contracts tied to planar trade may require performance conditions rather than time-based vesting.
The Waterdeep Trading Company stores all award terms in the Arcane Ledger to ensure that each accrual aligns with the service provided.
Final Thoughts
Stock-based compensation links the strength of the Waterdeep Trading Company to the dedication of its workers. These awards are both a reward and a responsibility. When recorded with care, they present a clear story of service, growth, and shared ownership. The seasonal expense and the growing reserve keep the ledger accurate. The final conversion into shares marks the worker’s lasting place in the company.
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