The NASPP Blog

March 25, 2015

NASPP To Do List

New Studies
We’ve posted the following new studies to the NASPP website:

Register for the Global Equity Incentives Survey
The NASPP is currently conducting the 2015 edition of our Global Equity Incentives Survey (co-sponsored with PwC).  Don’t miss out–issuers have to participate to have access to the full survey results. The first 50 companies to complete the survey will receive a 10% discount on their NASPP Conference registration. Register to participate today!

NASPP To Do List
Here’s your NASPP To Do List for the week:

– Barbara


March 24, 2015

Slow News Day

It’s a slow news day here at the NASPP. I don’t have anything pressing to blog about so I thought it would be a good time for a poll.  Below are a few questions that were recently posted to the NASPP Q&A Discussion Forum that are largely unanswered at the moment.  If they apply to you, please take a moment to indicate your answers so we can help these folks out. Thanks for indulging me!

If you can’t see the poll below, click here to participate in it. As always, if you are a contractor that works with multiple clients, please answer for just one of your clients (preferably one that won’t otherwise complete this poll).

– Barbara

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March 23, 2015

NASPP Chapter Meetings

Here’s what’s happening at your local NASPP chapter this week:

Silicon Valley The Silicon Valley chapter and the CEP Institute co-host the 11th Annual CEPI and Silicon Valley NASPP Symposium.  The Symposium features a keynote from Mike Malone, one of the world’s best-known technology writers, and 15 other great sessions on hot topics such as the FASB’s recently proposed amendments to ASC 718, practical tips for administering stock plans, and global developments impacting stock plans. I will be presenting with Andrew Schwartz of Computershare and Carrie Kovac of E*TRADE on “The Basics Behind the Beans: An Intro to Equity Comp Tax and Accounting.”  It’s not too late to register; I hope to see you there! (Tuesday, March 24, 8:00 AM)

Salt Lake City: Mark Chen and Vicki Davidson of Towers Watson present “Current State – What’s Happening in Executive Pay and Equity Compensation.” (Thursday, March 26, Noon)

Twin Cities
: Back by popular demand! The chapter hosts ““So, What are You Doing Now?—A Unique Opportunity to Meet and Share Experiences With Other Stock Compensation Professionals.” (Thursday, March 26, 7:30 AM)

– Barbara



March 19, 2015

Happy (Almost) Spring and Global Hot Topics

It’s a week of “happys”: happy St. Patrick’s day, happy spring (for those of us who have been counting the minutes until spring hits, that will happen at 6:45 pm EDT, 5:45 pm CDT, 4:45 pm MDT and 3:45pm PDT tomorrow, March 20th.) In such a lighthearted week, I decided to keep today’s blog on the lighter side as well.

In a recent survey of our members, it wasn’t surprising that our Global Stock Plans portal ranked in the top 3 of favorite portals (out of 45+ portals). With a myriad of complex issues ranging from securities and tax laws to exchange controls to labor laws to mobile populations (and on, and on), we know stock plan administrators and those who support them continue to place global administration near the top of the priority list.

We’ve heard you loud and clear, and now I need some additional help. We know you love the Global Stock Plans portal; now, please let us know what type of education and content most interests you in administering global stock plans. There is a brief poll below, but if it doesn’t appear, click here. For those who were so gracious to participate in Barbara Baksa’s “Hot or Not” poll last week, this is entirely unrelated. I guess we should call it “poll” month here in the NASPP Blog.

Happy (almost) spring!



March 18, 2015

NASPP To Do List

The NASPP Welcomes James Tozer as Our Newest Regional Representative
I am pleased to announce that James Tozer of E*TRADE is the NASPP’s newest Regional Representative for the southern NASPP chapters.  The Regional Representatives provide guidance to the chapters in their region and serve as a liaison between the chapters and the national organization.  As the long-term president of the San Diego chapter, we are sure that James’ perspective and experience will be very valuable to the southern region chapters.

Register for the Global Equity Incentives Survey
The NASPP is about to launch the 2015 edition of our Global Equity Incentives Survey (co-sponsored with PwC).  Don’t miss out–issuers have to participate to have access to the full survey results. The first 50 companies to complete the survey will receive a 10% discount on their NASPP Conference registration. Register to participate today!

NASPP To Do List
Here’s your NASPP To Do List for the week:

– Barbara


March 17, 2015

Survey Says… Hot or Not Results

In last week’s blog, I polled readers about how interested certain topics are to them.  I thought you might be interested in the results, so here they are. The graphs are a little small, but there’s no need to get out your cheaters; if you click on them, they will expand to a clearly readable size.

Hot or Not: Administration Round

Hot or Not.Admin

Hot or Not: CIC Round 

Hot or Not.CIC

 Hot or Not: Hodge Podge Round

Hot or Not.HP

Happy St. Patrick’s Day. I realize now that I should have worked some green into these charts.
- Barbara

March 16, 2015

NASPP Chapter Meetings

Here’s what’s happening with your local NASPP chapter this week:

Seattle: Jon Burg of Aon Hewitt/Radford and David Thomas of Wilson Sonsini Goodrich & Rosati present “Post Vest Holding Periods: The Intersection of Corporate Governance, Plan Design, & Financial Accounting.” (Tuesday, March 17, 11:30 AM)

Chicago: Robin Struve And Diana Doyle of Latham & Watkins present “Inversion Transactions and Equity Compensation—What You Should Know!” (Thursday, March 19, 7:30 AM)

KS/MO and Wisconsin: The chapters host a joint webinar featuring Bruce Brumberg of on “Tax Return Reporting: What You Need to Know & Communicate With Employees.” (Thursday, March 19, 12:00 PM)


March 10, 2015

Hot or Not?

It’s once again time to play the Hot or Not game. I have a list of possible topics for the 23rd Annual NASPP Conference; your job is to tell me whether each topic is “hot” (or not). Some quick guidelines:

  • Sizzling hot means you’d definitely want to attend a session the topic
  • Toasty warm means you might be interested in this topic
  • Ice cold means that you have no interest in this topic
  • No opinion means you don’t really know what the topic is or otherwise don’t have an opinion on it

The survey should appear below. If you don’t see it or can’t access it, click here to participate.

– Barbara


March 9, 2015

NASPP Chapter Meetings

Here’s what’s happening at your local NASPP chapter this week:

San Fernando Valley Bruce Brumberg of presents “Tax Return Reporting: What You Need to Know & Communicate With Employees.”  (Wednesday, March 11, 11:00 AM, via webcast only)

Florida: Michael Melbinger of Winston & Strawn presents and update on shareholder litigation relating to executive compensation. (Friday, March 13, 8:30 AM)

KS/MO: Emily Cervino of Fidelity presents “Hot Topics in Today’s Equity Compensation.” (Friday, March 13, 8:30 AM)


March 5, 2015

Post-Vest Holding Periods – Part 2

In a prior installment of this blog, I explored the renewed interest in mandatory holding periods for equity compensation post vest. In today’s blog, we’ll look at some of the scenarios where this makes the most sense.

To catch everyone up, make sure you read Post-Vest Holding Periods – Part 1 (February 19, 2015).

We’ve looked at some general reasons why companies may find it attractive to implement a requirement for a participant to hold shares after they are vested. Among the top considerations are ease of facilitating clawbacks, good corporate governance, points on the ISS Equity Plan Scorecard, and the possibility of a reduced fair value accounting expense. I now want to dive into the nuances of where these holding periods seem to make the most sense.

Does One Size Fit All?

While there are many compelling reasons to implement a post vest holding period, a closer look suggests that this may not be a one size fits all approach. This means that not all employees and not all forms of equity compensation are considered “equal” in determining if and how to apply mandatory holding periods. Let’s cover the “who” first, and then the “what.”

Who Should be Subject to Post-Vest Holding Periods?

In contemplating the intent behind the post-vest holding periods (ease of clawbacks, good governance, ISS scorecard points, etc.) it becomes clear that the ideal target for mandatory holding is the executive population. Not only are they the subject of most of the logic behind the holding periods, but this is also a population that tends to have significant amounts of equity compensation. Beyond that level within the organization, there are likely to be varied opinions about who else should be subject to mandated holding periods. There may be a case to include other levels of management, such as middle or senior managers who receive equity compensation. Should post-vest holding periods be broad based? Probably not. Employees who have no equity have nothing to “hold” and those with limited equity (such as only via participation in the ESPP and/or a limited amount of stock options) don’t appear to fit the profile that supports the “why” behind implementing holding periods. Additionally, employees within the non managerial ranks of the organization have tend to have no influence over governance practices, are not subject to clawbacks, and don’t typically represent a significant piece of the accounting expense pie.

What Types of Equity Compensation Make the Most Sense?

We’ll explore three major categories of equity compensation: restricted and performance awards, employee stock purchase plans (ESPPs) and stock options. According to the sources I’ve heard from on this topic, stock options are the least likely candidate for a post-vest holding period. Any mandatory holding period would be tied to the shares post exercise and since the vast majority of stock options are exercised in a same-day-sale transaction, there are most often no shares to tie to a holding period.

With stock options generally off the table, we are left with ESPP shares and restricted stock and performance awards. In my opinion, ESPPs fall into the “maybe” category. Certainly a company could implement a post purchase holding period. However, a key question is whether the population most engaged in ESPP is the same population that would be targeted by post-vest holding periods. We’ll explore the “who” should be affected shortly, but that is a key question in determining whether ESPP shares should be subject to such a mandated holding. Even if executives participate in the ESPP, they are most often likely to have other forms of equity compensation that would be more significant targets for holding periods. Additionally, employees contribute their own funds to the ESPP, and this may be an additional concern in evaluating whether a holding period makes sense (not so much at the executive level where it’s usually deemed good to have skin in the game, but at the mid or lower levels of the company).

The last category is restricted stock and performance awards/units. This appears to be the most likely area of focus for post-vest holding periods. In considering subjecting these types of award to mandatory holding post-vest, companies will need to consider the timing of taxation for awards and units. Restricted stock awards (absent an 83(b) election) are taxed upon vest, and the existence of a mandatory holding period can complicate matters if the participant is not permitted to sell shares to cover the taxes. Restricted stock units are subject to income tax when the award is distributed, making it more attractive to attach these types of awards to post-vest holding. Since income tax isn’t due until the shares are released to the employee, companies could delay settlement until after the post-vest holding period, eliminating the question of how to pay taxes if shares can’t be sold. FICA/FUTA taxes will still be due at vest for both awards and units, but there are ways to collect those taxes over time (such as using the IRS’s Rule of Administrative Convenience) or via payroll deduction from other cash compensation.

Scratching the Surface

This blog can only be so long, and I’ve only scratched the surface on the considerations for post-vest holding periods. One significant evaluation that I left out is the potential for a discount on the fair value for equity compensation subject to mandated hold after vest. This week I was fortunate enough to catch the DC/MD/VA Chapter meeting which (by pure coincidence) was on this exact topic. Terry Adamson of Aon Hewitt and Gustavo Dalanhese of E*TRADE did a great job of bringing companies up to speed on all of these considerations, including a deeper dive into the fair value savings. One thing I learned is that (several factors considered, including stock volatility) the discount can be significant. This is not a minor perk, but could be a strong driver in a company’s evaluation of whether or not to implement a post-vest holding period. We’re out of time today, but the good news is that next week’s NASPP webcast (March 11th) will explore this in much more detail. Be sure to tune in. And, for a quick run down, check out our Hold After Vest podcast episode (it’s much shorter than the webcast, so not as much detail, but definitely a great primer on this topic).


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