table of contents€¦ · · 2016-04-05table of contents 13 conferences, meetings and events ......
TRANSCRIPT
TABLE OF CONTENTS
13 CONFERENCES, MEETINGS AND EVENTS
15 TAKE COMMAND OF YOUR EQUITY PLANS
17 MAKING THE MOST OF YOUR DAY
18 MAKING YOUR LINKEDIN PROFILE WORK FOR YOU
19 SERVICING YOUR PLAN WITH INDUSTRY EXPERTS
20 RECOGNIZING NYSE HOLIDAYS
21 OFFERING OUR GLOBAL VIEW
23 TESTING YOUR KNOWLEDGE
1 INTRODUCTION
3 KEEP YOUR ESPP FREE FROM TAX-RELATED TRAPS
4 BUILDING EMPLOYEE LOYALTY
6 IMPROVING EMPLOYEE PARTICIPATION
7 CALCULATING THE COST BASIS OF STOCK
9 PROTECTING YOUR EMPLOYEE ASSETS
11 KEEPING YOU IN THE KNOW
5 THE INSIDE TRACK ON MANAGING CORPORATE INSIDERS
Copyright © 2015 Computershare Limited. All rights reserved. LinkedIn is a registered trademark of LinkedIn Corporation. WorldatWork is a registered trademark of WorldatWork.
Employee equity plans are definitely a
great way to align long-term company
and employee goals, but administering
them can be overwhelming — especially as
regulations evolve and plan designs shift to
solve for short-term aims. Fortunately, with
Computershare, you can ensure that your
program will be a success.
Kevin M. BrennanPresident > US Plan Managers
As responsibilities continue to grow and change for equity plan administrators,
we want to help you stay up to date. We’ve compiled the “Administrator’s Guide
to Employee Equity Plans” to provide you some key tips and tools to help you
manage your company’s equity programs, your participants, and even your
own career. From topics such as understanding the complex cost basis rules
to managing the intricacies of equity plans for corporate insiders, as well as
some handy time management ideas, this guide has you covered. For expanded
content, visit the guide’s companion site at computershare.com/adminguide and
sign up for our Insights newsletter at computershare.com/insights.
And remember, Computershare’s entire equity plans team is here to assist you
every step of the way. We offer a consultative approach to help you administer
your plan as well as promote it to your employees. We are also constantly
enhancing the experience for both the administrator and the participant. We’ve
enhanced our functionality to better support retirement eligibility taxation,
performance awards, tracking mobile employee demographics, and more.
Throughout 2015, we are upgrading the participant Web experience with a
refreshed look and mobile optimization that adapts the site to the size of the
user’s screen, be it a computer, a smartphone, or a tablet.
Thank you for your business. We appreciate it and work hard
every day to earn it. Your feedback is important and our team
is always here to listen and deliver ways that we can better
support you. Please feel free to contact me directly at
> 1
KEEP YOUR ESPP FREE FROM TAX-RELATED TRAPS
BUILDING EMPLOYEE LOYALTY
For an expanded list of ESPP tax tips and to see the full results
of the LSE study, go to computershare.com/adminguide
> 3
The London School of Economics conducted a survey of 3,800 employees to
determine how offering an ESPP can improve workplace performance. The results
showed a significant effect. Here are some of the benefits from offering an ESPP.
1. Hard Work. Plan members are more likely to work extra hours than non-members.
2. Pride of Ownership. Plan members feel like co-owners of the company. One-third check the stock price daily, versus 8% of non-members.
3. Valued Benefit. 75% of ESPP participants see it as a good investment.
4. Fewer Absences. Plan members take fewer days off (excluding vacation/annual leave) than non-members.
5. Worker Loyalty. ESPP participants are less likely to leave the company, even for a higher salary!
6. Increased Motivation. Plan members report higher on-the-job motivation versus non-members.
7. Workplace Satisfaction. ESPP participants are more likely to agree that the company is a good place to work.
8. Recommendations. Plan members are much more likely to recommend working at the company than non-members.
Employee stock purchase plans (ESPPs) can be a significant benefit to employees
and the issuing company. Administering an ESPP, however, can be challenging when
considering the numerous regulatory limitations. What follows is a list of top tax-
related traps to look out for when administering an ESPP.
1. Include controls to ensure participants do not exceed the annual $25,000 limit.
2. Be prepared to manage qualifying dispositions and W-2 reporting.
3. Look out for tax withholding implications among states and non-qualified plans.
4. Clearly communicate the rules for cost basis reporting.
5. Adjust the cost basis and fair market value after a corporate action.
6. Know the rules for transfers upon death.
7. Make sure your participant reporting clearly accounts for wash sales.
8. Provide a plain-English guide to Section 6039 reporting for your participants.
9. For non-U.S. companies, monitor the levels of foreign tax withholding.
THE INSIDE TRACK ON MANAGING CORPORATE INSIDERSTo say that the regulations surrounding corporate insiders are complex is an understatement. A strong compliance program is a must to keep your insiders and your company on the right side of the law. How confident are you in the management of your corporate insiders? Below are a few considerations when
reviewing your corporate insider compliance program.
1. Institute a pre-clearance protocol.
2. Benchmark your program against industry best practices.
3. Ensure insiders are properly trained on the program.
4. Review your insiders list periodically to ensure it is complete and accurate.
5. Ensure appropriate controls, monitoring and reporting exists for any awards, trades or changes in ownership.
6. Assign responsible people to file Forms 3, 4, 5 and Item 405 disclosure. Computershare’s Section 16 Manager can help.
7. Print out full year statements for each insider to review and sign off.
8. Disclose failures promptly.
9. Have insiders sign a statement that all reports were filed on time.
IMPROVING EMPLOYEE PARTICIPATIONWe know that your equity compensation program is an important part of your employee benefits package. But are your employees taking advantage of it?
Here are a few ways to help communicate your plan and improve participation.
1. Evaluate your plan design to ensure benefits are clear with incentives for participation.
2. Develop impactful communication materials utilizing online, telecom and print delivery channels.
3. Choose a time prior to a major event – open enrollment, purchase date, grant or vesting dates – to communicate to participants.
4. Engage leaders and current plan participants to continually promote your equity plans.
5. Set goals based upon your business objectives and employee population.
BONUS: Obtain a complimentary consultation on your program. Let us help you
achieve your participation goals. Contact Lu Ann Einholz, Communications Consultant,
at 732 491 0469 or [email protected].
ENGAGING YOUR EMPLOYEES VIA PHONE
Through our predictive autodialer solution, we can reach out to your employees at critical periods such as:
1. Options Expiring. Contact active and/or terminated employees to alert them of an upcoming stock option expiration date.
2. Grant Acceptance. Remind employees that need to acknowledge new grants issued.
3. Vesting of Restricted Stock. Remind employees that the restrictions on their shares have lapsed or that they’ve reached a certain milestone in their vesting schedule.
4. Annual Meeting. Remind employees to vote their shares during annual meeting season.
Contact your relationship manager if you’re looking for new ways to engage your employees with an autodialer solution.
For additional insights on insider
trading compliance programs,
download our white paper at
computershare.com/adminguide
> 5
CALCULATING THE COST BASIS
OF STOCK
Calculating the tax implications of cost basis — the original value of a security —
can be an overwhelming task. The regulations specific to employee equity awards
add another layer of complexity for plan sponsors and employees. To help address
common questions for managing cost basis requirements and processes we’ve
compiled a few guidelines to keep in mind.
For more information about managing cost basis requirements, sign up for our
Insights newsletter at computershare.com/insights or visit our partner site,
mystockoptions.com.
Only accounts for U.S. individuals require cost basis tracking and reporting. Rule of thumb: If the account receives a 1099-B for any share sales, then cost basis should be tracked within that account.
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Covered securities, for which brokers track cost basis, are only those purchased for cash, including cashless exercises of stock options and employee stock purchase plans. Vesting of restricted stock and stock-settled stock appreciation rights, as well as securities purchased before 2011, are not covered.
Watch out for wash sales. Wash sales occur when shares are sold at a loss, and shares in the same company are purchased within 30 days before and after the sale, requiring some or all of the loss to be disallowed.
Dividends reclassified as return of capital will reduce per-share cost basis for each lot held at the time the dividend is paid. This becomes more complex in plans with dividend reinvestment.
Remember the formula for cost basis of equity awards. Cash paid for the award plus compensatory income recognized.
Cost basis reported on Form 1099-B may be understated, or blank. Brokers can now only report the cash purchase price as cost basis, excluding compensatory income. Non-covered securities have no cost basis reported.
Stock splits, mergers, and spin-offs affect the per-share cost basis of all lots in the account. ESPPs require special oversight, because the fair market value prices at the beginning and ending of every offering period prior to the effective date will have to be adjusted.
Beneficiaries who inherit stock receive a “step-up” in cost basis to the fair market value of the stock with an acquisition date starting on the date of death. Any sales in the future are considered long-term for capital gain or loss reporting.
Strengthen recordkeeping standards. Under IRS rules, the taxpayer is responsible for proving the cost basis on any securities sold. Make sure accurate and complete records are retained and available. > 7
PROTECTING YOUR EMPLOYEE ASSETS
States are getting more aggressive with escheating unclaimed assets.
While the general consensus is that ESPP shares are not escheatable
while the holder is an active employee, they become fair game when
their employment status changes. Also, uncashed checks could be
up for escheatment, regardless of employment status. Before that
happens to your employees, let them know about the ways that they
can protect their assets from escheatment.
> Cash checks, no matter how small the amount
> Use Computershare’s Employee Online website to check account balances
> Contact Computershare by phone to inquire about your account
> Keep your address, phone number and other info on file up to date with your employer
> Know your state’s escheatment laws; do you live in a three-year or five-year state? Find out at naupa.org
Ways employees
can protect their
assets from
escheatment
> Receiving payments, such as dividends, via direct deposit
> Participating in a dividend reinvestment program
> Delivering federal tax forms or statements via regular mail
> Relying on an inquiry made on one stock account to protect all accounts or holdings with Computershare
Activities that MAY
NOT PROTECT
employee assets
from escheatment
> Educate employees about escheatment on every communication – statements, checks, electronic communications, plan information, HR page on internal website.
> Provide employees with a list of best practices for protecting their assets.
> Engage Georgeson Securities Corporation (a Computershare company) for a proactive shareholder cleanup and outreach program to identify and communicate with employees who are at risk for escheatment.
Ways to raise
employee
awareness of
escheatment rules
Computershare and its affiliates, Georgeson Securities Corporation and Georgeson Inc.* have several shareholder clean-up and outreach programs to help you minimize the risk. Talk to your relationship manager to learn more.
*Georgeson Securities Corporation and Georgeson Inc. are wholly owned subsidiaries of Computershare. > 9
National Association for Stock Plan Professionals (NASPP)naspp.comLeading membership association devoted to meeting the needs of stock plan professionals.
Global Equity Organization (GEO) globalequity.orgNon-profit association dedicated to advancing knowledge and understanding of equity compensation worldwide.
WorldatWork® worldatwork.orgNonprofit human resources association for professionals and organizations focused on compensation, benefits, work-life effectiveness and total rewards.
Employee Benefit News ebn.beneftitnews.comVideos, slideshows, podcasts, newsletters and conferences on the ever changing HR and benefits marketplace.
www.myStockOptions.comArticles, podcasts, videos and more for both participants and plan administrators alike.
www.mint.com/blogMint’s in-house blog touches on a number of personal finance issues, including strong information and coverage on the value of participating in employee stock plans.
@StockCompGuruBruce Brumberg from myStockOptions.com provides up-to-the-minute news and insight on employee plan administration.
@PerformensationDan Walter, leading expert and consultant on employee plans and a frequent speaker at industry events
@computershare You do follow us, right?
Industry Insights We Share
KEEPING YOU IN THE KNOW
The world of employee equity plans is ever-changing. It can be a challenge
to keep up with the latest in tax laws, regulatory issues, employee incentives…
it never ends. But you do have resources to which you can turn.
Twitter Accounts We Follow
Websites and Associations We Like
To read the full articles and view the webinars,
go to computershare.com/adminguide.
Important Information for Employee Plan Administrators in 2015This article covers important changes in SEC enforcement, accounting rules, cost basis, and ISS policies.
Equity Plans in China: Tips and InsightsThis informative webinar provides tips and insights on how best to navigate the extensive and oftentimes challenging process to set up an equity plan in China.
Tax Developments Affecting Global Equity Compensation ProgramsComptuershare’s ongoing series, produced in partnership with Ernst & Young, on global tax developments that could affect your company’s global equity programs.
> February 2015 webinar covered Australia, Brazil, France, Japan, Qatar and more.
> November 2014 webinar covered Austria, Canada, Kenya, Pakistan and more.
> August 2014 webinar covered China, Colombia, Germany, India and more.
> 12
CONFERENCES, MEETINGS AND EVENTS
WORLDatWORKThe Total Rewards 2015 Conference and Exhibition
May 18-20, 2015
Minneapolis, Minn.
GEO NATIONAL EQUITY COMPENSATION FORUM Sept. 14-16, 2015
Scottsdale, Ariz.
IN2015 Computershare | Georgeson
Oct. 7-9, 2015
Orlando, Fla.
NASPP 23rd Annual Conference and Exhibition
Oct. 27-30, 2015
San Diego, Calif.
STOCK AND OPTION SOLUTIONS (SOS) Aspirations Conference
Fall 2015
Location TBD
CEP SYMPOSIUM March 2016
Santa Clara, Calif.
GEO 17th Annual Conference
Spring 2016
Location TBD
> 14
> Online grant acknowledgement
> Multicurrency proceeds disbursements in 170+ currencies
> eDelivery for letters
> On-demand participant statements online
> Multilingual options for participants on Employee Online
> Reverse ACH for tax payments or option costs
> Participants can increase tax rates at exercise
> Unlimited access to the Knowledge Center of MyStockOptions.com
> BONUS! Mobile-optimized websites coming to all participants throughout 2015
TOOLS FOR PLAN PARTICIPANTS
TAKE COMMAND OF YOUR EQUITY PLANS
At Computershare, we believe in constant improvement. We have
developed a suite of tools to help you better manage your equity plans,
as well as tools for plan participants to manage their accounts. Here are
some of the favorites used by your peers and their plan participants. Many
of them were recommended by your peers on the Client Advisory Board.
Have a suggestion for a new feature that would improve our service for
you? Give your relationship manager a call.
TOOLS FOR STOCK PLAN ADMINISTRATORS
Coming in Fall 2015! Customized reporting tools
will be available to track and manage ESPP accounts.
> Performance awards tracking
> Mobile employee demographics tracking
> Retirement eligibility taxation management
> Adjustments and Corrections
Tool (ACT) to edit data on a single participant or grant
> Participant Web Interface (PWI) for read-only access to participant accounts
> File transmission monitoring tool for real-time view of all file exchanges and loading statuses
> Automated enrollment for ESPP
> Disqualified disposition tracking
> Section 6039 reporting
> Stock Plan Management Reporting Tool (SMARTSM) to access, format and create custom reports ONLINE BONUS: Go to computershare.com/adminguide for a list of the most popular reports used by administrators.
> 16
MAKING THE MOST OF YOUR DAY
These days we’re all asked to do
more with less. Regardless of your
job duties, it likely includes more
responsibilities than it did last year
or the year before. Here are some
tips you can use to get the most
out of your day.
> Use the first 30 minutes of each
day to plan out what you expect to
accomplish before going home.
> Don’t accept a request for a meeting
that doesn’t include an agenda.
> Download a browser app, such
as Freedom or SelfControl, which
allows you to set a window of time
in which you will be unable to access
distracting websites so you can focus
on your work.
> Take care of routine items first –
get them out of the way and use
the rest of your time on tasks that
interest you.
> If it takes less than five minutes, just
do it now (like, right now…we’ll wait).
> If you’re being bombarded with
emails or instant messages and you
need to get something done, unplug
your network cable or turn off the
wifi – just don’t forget to reconnect
when you’re done.
MAKING YOUR LINKEDIN PROFILE WORK FOR YOU
Create a personal brandUnderstand your audience
Tailor your profile to speak to the
people whose attention you are
trying to get.
Tell your story
Provide a snapshot of your
professional journey and aspirations.
Let your network speak for you
Get recommendations and
endorsements from colleagues,
employers and customers
Build your network of connectionsFind business contacts that help you succeed
Connect with past and present
colleagues, business partners and
other contacts
Stay in touch
Keep up with connections since you
never know when you might need to
reach out.
Find and join groupsFind groups
Check the “Groups You Might Like”
page or use the LinkedIn search tool.
Choose the right group for you
View the group’s “Discussions”
page. Check the group profile for
more information.
Join a group
Click “Join” or respond to an
invitation from a member.
BONUS TIP Showcase pageCreate an “employee plans”
showcase page on your company’s
profile to engage participants.
Showcase pages are designed for
building strong relationships with
people who want to follow specific
aspects of your business.
> Don’t let meetings turn into work
sessions. Meetings are for status
updates and planning next steps, not
plodding through work that should
have been done in advance.
> “Perfect” is the enemy of “done.”
Don’t allow your project to become
paralyzed by the unattainable goal
of perfection.
> Take notes from casual
conversations with colleagues.
Informal chats often produce better
results than meetings, but it’s easy
to forget the key points if you don’t
jot them down.
> Leave your work at work – unless
you’re in the midst of a crisis, there’s
not a whole lot you can get done
at 10 p.m. that can’t wait until the
next morning.
> 18
Our equity plans team is among the most knowledgeable and experienced
in the industry. They are members of all the major associations for stock
plan administrators, often speaking at local, national, and international
conferences and events. They bring this expertise to servicing your plan
participants every single day.
SERVICING YOUR PLAN WITH OUR INDUSTRY EXPERTS
Computershare in the U.S. follows the same holiday schedule
as the New York Stock Exchange, below. Since trades cannot be
made on these days, be sure your plan participants know about
the holiday schedule as well.
RECOGNIZING NYSE HOLIDAYS
Jeff Cohen Senior Vice President, Strategic Business Dev 201 680 4477
Kevin Brennan President201 680 4313
Scott HarriganSenior Vice President732 491 0450
Sheila FriersonVice President, Relationship Management 310 751 1496 Bob Bilotta
Senior Vice President201 680 4396
Mark ZollaSenior Vice President312 499 7011
Joe PetranySenior Vice President, Product201 680 2449
Mark BoemioVice President, Relationship Management 201 680 3460
Phyllis GarlandVice President, Relationship Management732 491 0464
Alex EstebanBusiness Manager, Client Services201 680 4928
New Year’s DayJanuary 1
Martin Luther King, Jr. DayJanuary 19
President’s DayFebruary 16
Good FridayApril 3
Memorial DayMay 25
Independence DayJuly 4 (Observed July 3)
Labor DaySeptember 7
Thanksgiving DayNovember 26(markets close at 1:00 p.m. EST on Friday, November 27)
ChristmasDecember 25 (markets close at 1:00 p.m. EST on Thursday, December 24)
2015
New Year’s DayJanuary 1
Martin Luther King, Jr. DayJanuary 18
President’s DayFebruary 15
Good FridayMarch 25
Memorial DayMay 30
Independence DayJuly 4
Labor DaySeptember 5
Thanksgiving DayNovember 24(markets close at 1:00 p.m. EST on Friday, November 25)
ChristmasDecember 25 (Observed December 26)
2016
> 20
OFFERING OUR GLOBAL VIEW
With offices located throughout the U.S., we offer you localized service that allows
your relationship manager the opportunity to engage with you on a regular basis.
And with Computershare’s global footprint, we are able to leverage operational and
call center support in locations around the world to provide optimal service to you
and your participants. We also have the knowledge and expertise to help you set up
plans in countries all over the world.
Canada220 clients
US368 clients
Australia120 clients
Asia100 clients
Europe353 clients
Offshore324 clients
South Africa
30 clients
Australia
Canada
Channel Islands
China
Denmark
Germany
Hong Kong
India
Ireland
Netherlands
New Zealand
South Africa
Spain
Sweden
United Kingdom
United States
If you’re looking to take your employee equity plans global, contact
your relationship manager to help.
Computershare maintains offices supporting
employee equity plans in these locations
> 22
Which was the first publicly traded company to issue stock? What is the oldest
written language known in existence? If you saw our Friday Fun Facts email
series, you already know the answers.
Missed it? No problem. Here are all of the fun facts we shared in the emails.
Keep an eye out for the next series.
TESTING YOUR KNOWLEDGE
WEEK 1 - DID YOU KNOW?
Cattle are the first and oldest form of
money. Each head of cattle was called
a caput, which is Latin for “head.” So,
a person with a lot of cattle had lots
of caput or “capital,” a word still used
today to describe money.
DID YOU ALSO KNOW...
COMPUTERSHARE OFFERS
PAYMENTS IN MULTIPLE
CURRENCIES
Plan participants are able to receive
their funds in any one of more than
70 currencies.
WEEK 2 - DID YOU KNOW?
The first email message ever sent was
by Ray Tomlinson to himself in 1971. It
was part of the ARPANET project, which
eventually turned into the Internet.
DID YOU ALSO KNOW...
COMPUTERSHARE OFFERS
CUSTOMIZED PARTICIPANT
COMMUNICATIONS
Our expert communications team is
ready to help you design a program
tailored to the unique needs of
your employees.
WEEK 3 - DID YOU KNOW?
The shortest flight one can
purchase is from the Scottish Isle
of Westray to Papa Westray. It lasts
just two minutes, spanning a little less
than two miles.
DID YOU ALSO KNOW...
COMPUTERSHARE OFFERS
ROBUST MOBILITY TRACKING
FUNCTIONALITY
Track and report on demographic
information for mobile employees
across multiple countries and
U.S. states.
WEEK 4 - DID YOU KNOW?
The Dutch East India Company,
formed in 1602, undertook the world’s
first IPO, issuing shares to raise
capital to fund its voyages, making it
the first publicly traded company to
issue stock.
DID YOU ALSO KNOW...
COMPUTERSHARE OFFERS
EXECUTIVE SERVICES
Our highly qualified team of certified
equity professionals is ready to assist
executive officers with selling their
plan shares.
WEEK 5 - DID YOU KNOW?
The oldest written language known in
existence is Sumerian, dating back to
3100 B.C., in southern Mesopotamia.
DID YOU ALSO KNOW...
COMPUTERSHARE OFFERS MULTI-
LINGUAL PARTICIPANT SUPPORT
Multi-lingual support is available on the
Employee Online website and will soon
be available on the phone via live reps
through our call center in Barcelona.
WEEK 6 - DID YOU KNOW?
The Olympic flame is lit at Olympia,
Greece with a concave mirror and the
sun’s rays. The flame then begins a
journey from Greece to the host nation
where it is paraded around for months
until the opening ceremonies.
DID YOU ALSO KNOW...
COMPUTERSHARE OFFERS ROBUST
PERFORMANCE AWARDS TOOLS
Manage and track performance
awards, apply interim performance
measurements to grants, accrue cash
dividends until vesting, and more.
WEEK 7 - DID YOU KNOW?
Today’s mobile phones on average
have more computing power than
the computers used for the Apollo 11
moon landing.
DID YOU ALSO KNOW...
COMPUTERSHARE OFFERS
PARTICIPANTS A MOBILE-
OPTIMIZED WEB EXPERIENCE
Throughout 2015, we will roll out a
mobile-optimized web experience
to plan participants, offering full
functionality, no matter what
device is used.
WEEK 8 - DID YOU KNOW?
The first newspaper, the Acta Diurna,
was published in 59 B.C. in Rome.
DID YOU ALSO KNOW...
COMPUTERSHARE OFFERS
BUSINESS OBJECTS REPORTING
On-demand access to standard reports
for options, restricted stock and
performance awards plans. COMING IN
2015: Expanded reporting for employee
stock purchase plans.
> 24
ABOUT COMPUTERSHARE
Computershare is a global market leader in transfer agency, employee equity
plans, proxy solicitation, stakeholder communications, and other diversified
financial and governance services. Many of the world’s leading organizations
use Computershare’s services to help maximize the value of relationships with
their investors, employees, creditors, members and customers.
cpm.computershare.com