Contact InfoErin Newell, CEPAccount ManagerSoliumOffice:
480-308-8174Email: [email protected]
Alicia Mladsi, CEPStrategic Client ManagerSoliumOffice: (203)
447-5845Email: [email protected]
*Welcome & thank you for having us. Janet & I attended
the 20th Annual NASPP conference a few weeks ago in New Orleans. In
this presentation we will each cover 5 session from the conference.
Since we cant go over all of the information from the sessions, we
tried to pull out important or new items to shares with you. I also
brought along the books from the conference that contain all the
presentations as well as additional inserts on each topic. Feel
free to take a look through them at the end of our presentations.
If you have questions or comments throughout the presentation, feel
free to stop & ask. *The first session I will cover is Making
Your Vendor Relationships More Effective. The panel included two
issuer or plan administrators, Larry Petz from Dana Holdings &
Erin Madison from Broadcom. As well as one vendor, John Hammond
from AST. And Jen Baehr from NASPP. *The first session I will cover
is Making Your Vendor Relationships More Effective. The panel
included two issuer or plan administrators, Larry Petz from Dana
Holdings & Erin Madison from Broadcom. As well as one vendor,
John Hammond from AST. And Jen Baehr from NASPP. *The first session
I will cover is Making Your Vendor Relationships More Effective.
The panel included two issuer or plan administrators, Larry Petz
from Dana Holdings & Erin Madison from Broadcom. As well as one
vendor, John Hammond from AST. And Jen Baehr from NASPP. *The first
session I will cover is Making Your Vendor Relationships More
Effective. The panel included two issuer or plan administrators,
Larry Petz from Dana Holdings & Erin Madison from Broadcom. As
well as one vendor, John Hammond from AST. And Jen Baehr from
NASPP. *Welcome & thank you for having us. Janet & I
attended the 20th Annual NASPP conference a few weeks ago in New
Orleans. In this presentation we will each cover 5 session from the
conference. Since we cant go over all of the information from the
sessions, we tried to pull out important or new items to shares
with you. I also brought along the books from the conference that
contain all the presentations as well as additional inserts on each
topic. Feel free to take a look through them at the end of our
presentations. If you have questions or comments throughout the
presentation, feel free to stop & ask. *The first session I
will cover is Making Your Vendor Relationships More Effective. The
panel included two issuer or plan administrators, Larry Petz from
Dana Holdings & Erin Madison from Broadcom. As well as one
vendor, John Hammond from AST. And Jen Baehr from NASPP. *Today
there are several different options when it comes to equity
vendors. I think we are all pretty familiar with the first three,
full outsource, self- administration & partial administration
but the last one, Multi-vendor is one that has grown a lot &
continues to grow. With the importance of mobility tracking, a lot
of issuers are looking for additional vendors for recordkeeping,
tax compliance, etc for mobility.
Motivation is needed to have multiple vendors. Between all the
different platforms, vendors, there are somewhere near 116,000
combinations. *Once your have selected a vendor, the speakers
really stressed the importance of including all individuals
involved in equity in the contract process. Finance, Payroll, Tax,
etc. Anyone who is going to touch the software or rely on
data/reports from the vendor should be insure their specific needs
are met. Erin from Broadcom gave an example that their company has
a very thorough vendor selection process where they bring in the
vendor for a full day & there an hour or two scheduled with
each department so everyone has their specific questions
answered.
If your attorneys or legal team are the only ones reviewing the
contract, they may only focus on the legal language and not
service. Make sure you request that the service level agreement is
included in the contract. Often times these are not standard &
they may not even been in the contract unless you request it.
*Again, we talked about understanding the service offering when
looking for a new vendor. Make sure you also now the capabilities
of the software. Again, ensuring they fit the needs of all
involved. Make sure all questions are answered up front. Finally,
request references. One suggestion the speakers had was to request
references of your choice, not just the references that the vendor
provides.
To help strengthen the relationship with your current vendor,
schedule regular meetings with them. That way you have a set time
where you can discuss open items or get questions answered. Make
suggestions for future enhancements, if there is something you
need, most likely the vendor has other clients that are looking for
similar functionality so dont be shy about requests. Check with
vendors regarding training classes they may offer, a lot vendors
will provide training- either live or maybe recorded sessions. *The
next session I will cover, The Future of Equity Compensation, was
one of the keynote sessions. The panel included three of the stock
plan services departments for Bank of America Merrill Lynch, Morgan
Stanley Smith Barney & ETRADE. Elizabeth Dodge from SOS
moderated the session. *Again, we talked about understanding the
service offering when looking for a new vendor. Make sure you also
now the capabilities of the software. Again, ensuring they fit the
needs of all involved. Make sure all questions are answered up
front. Finally, request references. One suggestion the speakers had
was to request references of your choice, not just the references
that the vendor provides.
To help strengthen the relationship with your current vendor,
schedule regular meetings with them. That way you have a set time
where you can discuss open items or get questions answered. Make
suggestions for future enhancements, if there is something you
need, most likely the vendor has other clients that are looking for
similar functionality so dont be shy about requests. Check with
vendors regarding training classes they may offer, a lot vendors
will provide training- either live or maybe recorded sessions.
*Again, we talked about understanding the service offering when
looking for a new vendor. Make sure you also now the capabilities
of the software. Again, ensuring they fit the needs of all
involved. Make sure all questions are answered up front. Finally,
request references. One suggestion the speakers had was to request
references of your choice, not just the references that the vendor
provides.
To help strengthen the relationship with your current vendor,
schedule regular meetings with them. That way you have a set time
where you can discuss open items or get questions answered. Make
suggestions for future enhancements, if there is something you
need, most likely the vendor has other clients that are looking for
similar functionality so dont be shy about requests. Check with
vendors regarding training classes they may offer, a lot vendors
will provide training- either live or maybe recorded sessions.
*Again, we talked about understanding the service offering when
looking for a new vendor. Make sure you also now the capabilities
of the software. Again, ensuring they fit the needs of all
involved. Make sure all questions are answered up front. Finally,
request references. One suggestion the speakers had was to request
references of your choice, not just the references that the vendor
provides.
To help strengthen the relationship with your current vendor,
schedule regular meetings with them. That way you have a set time
where you can discuss open items or get questions answered. Make
suggestions for future enhancements, if there is something you
need, most likely the vendor has other clients that are looking for
similar functionality so dont be shy about requests. Check with
vendors regarding training classes they may offer, a lot vendors
will provide training- either live or maybe recorded sessions.
*Again, we talked about understanding the service offering when
looking for a new vendor. Make sure you also now the capabilities
of the software. Again, ensuring they fit the needs of all
involved. Make sure all questions are answered up front. Finally,
request references. One suggestion the speakers had was to request
references of your choice, not just the references that the vendor
provides.
To help strengthen the relationship with your current vendor,
schedule regular meetings with them. That way you have a set time
where you can discuss open items or get questions answered. Make
suggestions for future enhancements, if there is something you
need, most likely the vendor has other clients that are looking for
similar functionality so dont be shy about requests. Check with
vendors regarding training classes they may offer, a lot vendors
will provide training- either live or maybe recorded sessions.
*Again, we talked about understanding the service offering when
looking for a new vendor. Make sure you also now the capabilities
of the software. Again, ensuring they fit the needs of all
involved. Make sure all questions are answered up front. Finally,
request references. One suggestion the speakers had was to request
references of your choice, not just the references that the vendor
provides.
To help strengthen the relationship with your current vendor,
schedule regular meetings with them. That way you have a set time
where you can discuss open items or get questions answered. Make
suggestions for future enhancements, if there is something you
need, most likely the vendor has other clients that are looking for
similar functionality so dont be shy about requests. Check with
vendors regarding training classes they may offer, a lot vendors
will provide training- either live or maybe recorded sessions. *The
next session I will cover, The Future of Equity Compensation, was
one of the keynote sessions. The panel included three of the stock
plan services departments for Bank of America Merrill Lynch, Morgan
Stanley Smith Barney & ETRADE. Elizabeth Dodge from SOS
moderated the session. *The first question asked to the panel was
What are your thoughts about the future direction of outsourcing
plan administration? Each speaker gave their opinion for the most
part they all agreed that outsourcing will continue as most
companies are forces to do more with less resources today & in
most cases it make more sense to outsource the administration of
their plans to some degree. They also mentioned that our industry
is in a war for talent and it is a challenge to bring young people
into the industry, not everyone dreams of becoming a stock plan
admin when they grow up.
Finally, they talked about right sourcing, working with issuer
to find the right solution for them. Not every model or service
option is right for all clients so its important to really find the
right fit. *The next question was What are the greatest overall
challenges facing the equity comp industry today?
Again, the war for talent issue was discussed.
Also, education & tax planning. It is still a challenge to
effective communicate equity plans to employees. Also, the
importance of tax planning for equity as well as educating employee
on using equity awards in their retirement planning. *The last
question asked was What are the most significant challenges of
global stock plans & how do you envision our industry rising to
those challenges?
I believe they all felt that mobility was the biggest challenge
facing the industry today and the need to automate it. Today
mobility is very complex and automation is needed to make it easier
for companies. There are probably a lot of companies not tracking
employee mobility because they dont have the tools or resources
& it is so complicate.
Again, communication & education was discussed so both as an
overall challenge for the industry as well as a significant
challenge for global plans. Ensuring that equity related documents,
agreements, education is translated in the languages of global
participants.*Next session was Keeping Up with the updates this
session was focused on where to go to get industry information
& how to manage all of the information out there. *Next session
was Keeping Up with the updates this session was focused on where
to go to get industry information & how to manage all of the
information out there. *Next session was Keeping Up with the
updates this session was focused on where to go to get industry
information & how to manage all of the information out there.
*Next session was Keeping Up with the updates this session was
focused on where to go to get industry information & how to
manage all of the information out there. *Next session was Keeping
Up with the updates this session was focused on where to go to get
industry information & how to manage all of the information out
there. *Next session was Keeping Up with the updates this session
was focused on where to go to get industry information & how to
manage all of the information out there. *Next session was Keeping
Up with the updates this session was focused on where to go to get
industry information & how to manage all of the information out
there. *The next presentation, Value & Valuations: Making Sense
of Long Term Incentive Data, the first half of the presentation
focused on LTI survey data, valuations methods/models but the part
that I found most interesting was the Starbucks Case Study.*At
Starbucks they have a broad based plan, so they grant to thousands
of employees all around the world. Their focus to show their
partners the true value of their equity awards. They actually put
together very detailed summaries on how a partners the economic
value is translated to shares. They show the estimated value upon
vesting. In the examples they provided, they estimated the stock
price would grow at an annualized rate of 10% & they showed the
value of the stock upon exercise or release after vesting.
*Billy from Starbucks also stress the importance of pre-planning
for events & proving clear communication to participants. His
moto is the 5 Ps- Proper Planning Prevents Poor Performance.
At Starbicks, their overall goal is to work with their partners
to create financial wellness. They do that by showing the value of
their total compensation including equity. *The next presentation
Ill cover is Withhold now or forever speak your piece. Again we
have a good mix on the panel, two issuers, an attorney and an
individual from PWC. *The next presentation Ill cover is Withhold
now or forever speak your piece. Again we have a good mix on the
panel, two issuers, an attorney and an individual from PWC. *The
next presentation Ill cover is Withhold now or forever speak your
piece. Again we have a good mix on the panel, two issuers, an
attorney and an individual from PWC. *The next presentation Ill
cover is Withhold now or forever speak your piece. Again we have a
good mix on the panel, two issuers, an attorney and an individual
from PWC. *The next presentation Ill cover is Withhold now or
forever speak your piece. Again we have a good mix on the panel,
two issuers, an attorney and an individual from PWC. *The next
presentation Ill cover is Withhold now or forever speak your piece.
Again we have a good mix on the panel, two issuers, an attorney and
an individual from PWC. *The next presentation Ill cover is
Withhold now or forever speak your piece. Again we have a good mix
on the panel, two issuers, an attorney and an individual from PWC.
*The next presentation Ill cover is Withhold now or forever speak
your piece. Again we have a good mix on the panel, two issuers, an
attorney and an individual from PWC. *The next presentation Ill
cover is Withhold now or forever speak your piece. Again we have a
good mix on the panel, two issuers, an attorney and an individual
from PWC. *The next presentation Ill cover is Withhold now or
forever speak your piece. Again we have a good mix on the panel,
two issuers, an attorney and an individual from PWC. *The next
presentation Ill cover is Withhold now or forever speak your piece.
Again we have a good mix on the panel, two issuers, an attorney and
an individual from PWC. *The next presentation Ill cover is
Withhold now or forever speak your piece. Again we have a good mix
on the panel, two issuers, an attorney and an individual from PWC.
*The next presentation Ill cover is Withhold now or forever speak
your piece. Again we have a good mix on the panel, two issuers, an
attorney and an individual from PWC. *This session was focused on
administrative process for tax withholding on equity
transactions.
Starting out with a few general administrative considerations,
the importance of a timeline of events for the year or quarter so
you can tracking vestings, etc & the import deadlines
surrounding them. Again, communication is important, making sure
you are communicating to participants that these events are coming
up & what is required by them. Finally, choices vs requirements
when it comes to tax withholding options. If your company wants to
offering multiple choices for tax withholding, for example paying
cash for taxes or share withholding, make sure there is a default
in case you have participants who do not make an election. Also
make sure there is a deadline to make the election as well as when
payment must be remitted ( if paying cash). *More in depth on the
different tax withholding methods.
Share withholding vs Sell to cover, for example, if your company
is concerned about cash flow, share withholding probably isnt a
good method. For sell to cover, there is a dilutive impact as well
as a stock price fluctuations between vest date & date shares
are actually sold.
For Cash withhold- one item mentioned was regarding collecting
FICA for employees who become retirement eligible & shares will
be issued upon retirement. If FICA is due, requiring employees to
pay cash is the easiest option. It also helps waiting until the end
of the year process so employees may have already maxed out on SS
& the Medicare amount is hopefully minimal. Educating
participants on this is key as well, participants will most likely
be confused that they have to pay taxes on shares they are not
receiving until they retire.
Rule Administrative Convenience- as I mentioned for retirement
eligible employees, if your company allows deferrals on RSU for
example, the company can delay the tax reporting process until a
later date in the year or at the end of the year when they can
process all at once.
Final item regarding cash withholding relates to international
participants in ESPP. In some countries the purchase will trigger a
taxable event. If the employee is paying cash for taxes or paying
the tax through payroll, this can take a large portion of their
paycheck so its important to communicate the tax implications to
employees so they are aware. Also it may be possible to plan the
purchase periods so they fall in an open trading window &
participant could sell some shares to cover the taxes if necessary.
*The final item regarding ISO, generally the rule as always been
that taxes should never be withheld on an ISO exercise.
Pennsylvania does require tax withholding at time of exercise even
on an ISO. So if you have participants in Pennsylvania, you might
want to make look into this & ensure you are complying with the
state tax withholding. *Next session was Keeping Up with the
updates this session was focused on where to go to get industry
information & how to manage all of the information out there.
*Other resources,
Newsletter alerts ( the big 4 accounting firms & many other
firms (NASPP, GEO), law firms, etc offer subscriptions to
newsletter & alerts
Local contacts- HR, payroll, finance- They know your plans &
companyThey arent experts, they may not fully understand the
difference between the local rules & the rules of the us
issuer
Webinars- free, might be more popular topics
Seminars, Conferences- can be expensive
*Other resources,
Newsletter alerts ( the big 4 accounting firms & many other
firms (NASPP, GEO), law firms, etc offer subscriptions to
newsletter & alerts
Local contacts- HR, payroll, finance- They know your plans &
companyThey arent experts, they may not fully understand the
difference between the local rules & the rules of the us
issuer
Webinars- free, might be more popular topics
Seminars, Conferences- can be expensive
*Other resources,
Newsletter alerts ( the big 4 accounting firms & many other
firms (NASPP, GEO), law firms, etc offer subscriptions to
newsletter & alerts
Local contacts- HR, payroll, finance- They know your plans &
companyThey arent experts, they may not fully understand the
difference between the local rules & the rules of the us
issuer
Webinars- free, might be more popular topics
Seminars, Conferences- can be expensive
*Other resources,
Newsletter alerts ( the big 4 accounting firms & many other
firms (NASPP, GEO), law firms, etc offer subscriptions to
newsletter & alerts
Local contacts- HR, payroll, finance- They know your plans &
companyThey arent experts, they may not fully understand the
difference between the local rules & the rules of the us
issuer
Webinars- free, might be more popular topics
Seminars, Conferences- can be expensive
*Other resources,
Newsletter alerts ( the big 4 accounting firms & many other
firms (NASPP, GEO), law firms, etc offer subscriptions to
newsletter & alerts
Local contacts- HR, payroll, finance- They know your plans &
companyThey arent experts, they may not fully understand the
difference between the local rules & the rules of the us
issuer
Webinars- free, might be more popular topics
Seminars, Conferences- can be expensive
*Next session was Keeping Up with the updates this session was
focused on where to go to get industry information & how to
manage all of the information out there. *Most of the presentation
covered the NASPP Global Stock Plan Portal. The portal currently
has country specific guides for 33 countries. The guide
addresses:-employeement law-tax issues -other considerations.
The guides are written by local practitioners in each country
(generally lawyers & accountants).
You can also subscribe to alerts for these countries so you will
receive an email when a updates is posted to the portal for a
country.
Currently the UK has the most alert subscribers, followed by
Canada, Germany & China.*Other resources,
Newsletter alerts ( the big 4 accounting firms & many other
firms (NASPP, GEO), law firms, etc offer subscriptions to
newsletter & alerts
Local contacts- HR, payroll, finance- They know your plans &
companyThey arent experts, they may not fully understand the
difference between the local rules & the rules of the us
issuer
Webinars- free, might be more popular topics
Seminars, Conferences- can be expensive
*The next presentation, Value & Valuations: Making Sense of
Long Term Incentive Data, the first half of the presentation
focused on LTI survey data, valuations methods/models but the part
that I found most interesting was the Starbucks Case Study.*At
Starbucks they have a broad based plan, so they grant to thousands
of employees all around the world. Their focus to show their
partners the true value of their equity awards. They actually put
together very detailed summaries on how a partners the economic
value is translated to shares. They show the estimated value upon
vesting. In the examples they provided, they estimated the stock
price would grow at an annualized rate of 10% & they showed the
value of the stock upon exercise or release after vesting.
*At Starbucks they have a broad based plan, so they grant to
thousands of employees all around the world. Their focus to show
their partners the true value of their equity awards. They actually
put together very detailed summaries on how a partners the economic
value is translated to shares. They show the estimated value upon
vesting. In the examples they provided, they estimated the stock
price would grow at an annualized rate of 10% & they showed the
value of the stock upon exercise or release after vesting.
*At Starbucks they have a broad based plan, so they grant to
thousands of employees all around the world. Their focus to show
their partners the true value of their equity awards. They actually
put together very detailed summaries on how a partners the economic
value is translated to shares. They show the estimated value upon
vesting. In the examples they provided, they estimated the stock
price would grow at an annualized rate of 10% & they showed the
value of the stock upon exercise or release after vesting.
*At Starbucks they have a broad based plan, so they grant to
thousands of employees all around the world. Their focus to show
their partners the true value of their equity awards. They actually
put together very detailed summaries on how a partners the economic
value is translated to shares. They show the estimated value upon
vesting. In the examples they provided, they estimated the stock
price would grow at an annualized rate of 10% & they showed the
value of the stock upon exercise or release after vesting.
*At Starbucks they have a broad based plan, so they grant to
thousands of employees all around the world. Their focus to show
their partners the true value of their equity awards. They actually
put together very detailed summaries on how a partners the economic
value is translated to shares. They show the estimated value upon
vesting. In the examples they provided, they estimated the stock
price would grow at an annualized rate of 10% & they showed the
value of the stock upon exercise or release after vesting.
