DFT-GGA periodic slab calculations are used to examine ethylene dehydrogenation paths over Pd(111). The most favorable adsorption modes along with their corresponding binding energies for all C2Hx intermediates (acetylene, acetylidene, ethylene, ethyl, ethylidene, ethylidyne, vinyl, and vinylidene) are analyzed for 0.25 monolayer coverage on Pd(111). The binding energies are used to calculate the overall reaction energies for a number of elementary C-H bond activation and isomerization pathways that are likely involved in the decomposition of ethylene to ethylidyne over the well-defined Pd(111) surface. The intrinsic activation barrier for the dehydrogenation of ethylene to vinyl is determined using transition state search calculations. The stability of the surface vinyl species relative to ethylidyne is assessed by computing the activation barriers for the two-step conversion of vinyl to ethylidyne, via an ethylidene surface intermediate. Calculations indicate that the barrier for the conversion of vinyl to ethylidyne over Pd(111) is 84 kJ/mol, which is 67 kJ/mol lower than the computed barrier for vinyl formation from ethylene (151 kJ/mol). This is in agreement with UHV experimental literature that have consistently identified ethylidyne, but have not detected the vinyl species, during the thermal reactions of ethylene on the Pd(111) surface.