  Although the growth of share-based payments with performance conditions
(hereafter, SPPC) is prominent today, the theoretical price of SPPC has not
been sufficiently studied. Reflecting such a situation, the current accounting
standards for share-based payments issued in 2004 have had many problems. This
paper develops a theoretical SPPC price model with a framework for a marginal
utility-based price, which previous studies proposed is the price of contingent
claims in an incomplete market. This paper's contribution is fivefold. First,
we restricted the stochastic process to a certain class to demonstrate how to
consistently change all variables' probability distributions, which affect the
SPPC payoff. Second, we explicitly indicated not only the stochastic processes
of the stock price process and performance variables under the changed
probability, but also how the changes in the performance variables' drift
coefficients related to stock betas. Third, we proposed a convenient model in
application that uses only a few parameters. Fourth, we provided a method to
estimate the parameters and improve the estimation of both the price and
parameters. Fifth, we illustrated the problems in current accounting standards
and indicated how the theoretical price model can significantly improve them.
