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How unit value is set

Where the price of one unit comes from, who decides it, and how often it changes.

This is the question everyone asks first. The short answer: unit value follows company performance. It is calculated from real financial results, not set by opinion, and not set by your manager.

The calculation#

  1. 1The company reports its profit figure for the period. This is normally EBITDA, meaning earnings before interest, tax, depreciation and amortisation. In plain terms, what the business earned from actually operating.
  2. 2That figure is multiplied by an agreed multiple to give the company a total value. The multiple reflects what businesses of that type and size typically sell for.
  3. 3A percentage of that value is set aside for the incentive plan. This is agreed once, when the plan is created.
  4. 4That pool is divided by the total number of units in the plan. The result is the value of one unit.

So: profit, times multiple, times the plan share, divided by total units. Every step is a number the company can point to.

A worked example#

A company reports 500,000 in profit for the year. The agreed multiple is 4, which values the business at 2,000,000. The plan holds 10 percent of that, so the pool is 200,000. There are 10,000 units in issue. One unit is therefore worth 20.

An employee holding 350 earned units is holding 7,000 of value. If profit rises to 600,000 the next year and nothing else changes, the unit value becomes 24, and the same 350 units are now worth 8,400. The employee did not receive more units. The units they already had became more valuable.

Who publishes it#

Only the Longpass team records financial results and publishes a unit value. A company admin cannot type in a number they like, and neither can an employee. This is deliberate. It keeps the figure credible for everybody looking at it.

Once published, the new value appears immediately in every employee portal for that company.

How often it changes#

Most companies publish once a quarter or once a year. Between publications the value stays where it is. Your portal always shows the most recently published figure and the date it was set, so you know how current it is.

Value can fall. If the company performs worse, the unit value goes down and holdings are worth less. This is the flip side of a plan that tracks real performance. It is not a fixed savings account.
Note. If your portal shows a dash instead of a value, no unit value has been published for your company yet. Your units are still recorded and still earning. Ask your admin when the first valuation is due.