n McElgunn v Vermilion Energy Inc., 2026 ABKB 531 (CanLII) Justice Simard had to decide what date should be used to determine the value of a stock option that was improperly denied to the plaintiff.
[10] Vermilion argues that I should use the $17.14 share price on the April 1, 2023 vesting date. It says that this award would fully compensate Ms. McElgunn for what she lost, and that to award damages based on a higher share price would speculatively overcompensate her, since there is no evidence about her holding and trading practices regarding earlier Vermilion share awards.
[11] Ms. McElgunn says that the Shares should be valued using the highest trading price after the April 1, 2023 vesting date for which there is evidence. This was $21.60, the trading price on September 11, 2023. She says this award would properly give her the benefit of the doubt as the wrongfully terminated employee, giving effect to the principle that where the employer’s conduct deprived the employee of the choice of when to sell shares, the employer should bear the burden of that conduct. In the alternative, Ms. McElgunn submits that the average of the vesting price and the highest trading price (which would be $20.11) would also be a fair award, in recognition of the fact that no one can now know when she would have sold her shares, and it is unlikely that she would have sold at the very peak of the market.
The Court decided that the vesting date was appropriate in this case.
Vermilion’s breach was to not provide the Shares to Ms. McElgunn on April 1, 2023. But for that breach, she would have had the Shares on April 1, 2023. However, Ms. McElgunn bore the onus of leading evidence to prove what she would have done with the Shares, had she received them at that time. There was nothing preventing her from introducing evidence on that point in the Arbitration, alongside the detailed evidence that was introduced about the post-April 1, 2023 share prices. However, Ms. McElgunn did not enter any such evidence. Vermilion did nothing to prevent her from leading that type of evidence.
As a result of this evidentiary gap, it would be completely speculative for me to make any finding that Ms. McElgunn would have employed any particular strategy and sold the Shares at any particular time, for any particular price.
In these circumstances, there is no legal or equitable basis on which I could give Ms. McElgunn “the benefit of the doubt” or make Vermilion bear the consequences of her failing to satisfy her onus by leading evidence on this point.
My Comments:
This case makes it clear, that absent evidence to the contrary, the proper date of valuation os the vesting date.
This makes sense for a number of reasons:
First and foremost it creates certainty, something that is gravely missing from employment law.
Second it is neutral. Sometimes the price after vesting goes up and sometimes it goes down.
Third, if the Plaintiff truly thought that the price would go up after the vesting date, there is nothing preventing them from going into the market ( assuming the company is publicly traded ) and buying the shares themselves.
I am only aware of one case where evidence was actually led to show that in the past the Plaintiff did not sell the shares on the vesting date . In Adelman v IBM ( 2026 ONSC 420) the evidence showed that in the past the Plaintiff held on his IBM shares an average for 402 days. Therefore the Court valued the shares 402 days after vesting.
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