The NASPP Blog

August 30, 2016

Shining a Spotlight on Director Compensation

Our popular “Meet the Speaker” series, featuring interviews with speakers at the 24th Annual NASPP Conference, is great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.

For today’s “Meet the Speaker” interview, we feature Doreen Lilienfeld of Shearman & Sterling, who will lead the session “Shining a Spotlight on Director Compensation

Here is what Doreen had to say:

NASPP: Why is the topic of director compensation particularly timely right now?

Doreen: Although director compensation rarely receives the same attention paid to executive compensation, recent high profile decisions in the Delaware courts have placed it in the spotlight. Companies that fail to adhere to the procedures for shareholder ratification of director compensation provided for in these decisions may find their directors in the crosshairs of a plaintiffs’ attorney claiming breach of fiduciary duty.

NASPP: What is a common mistake companies make with awards to directors and how can they avoid this?

Doreen: Many companies provide for an annual limit on director compensation grants in their equity compensation plans. Previously, these companies were able to take the position that approval of the equity compensation plan also equated to shareholder ratification of the director equity grants. In many of these plans, however, the annual limit is not meaningful or specific and, therefore, the Delaware Courts have held that no shareholder ratification has taken place. Companies can avoid this problem by amending their plans to include meaningful limits if they think the risk of litigation is high.

NASPP: What is the silver lining?

Doreen:  Although plaintiffs’ lawyers now view director compensation as a new avenue to extract payments from companies, these lawsuits can be easily avoided through proper planning. Including meaningful limits on director compensation awards in equity compensation plans that are put to a shareholder vote will ensure that directors continue to be protected by the business judgment rule.

NASPP: What is something people don’t know about you?

Doreen: I’m renovating a landmarked Harlem brownstone built at the turn of the last century from the ground up while living in it!

Don’t miss Doreen’s session, “Shining a Spotlight on Director Compensation,” at the NASPP Conference!

About the NASPP Conference

The 24th Annual NASPP Conference will be held from October 24-27 in Houston. This year’s program features close to 100 sessions on today’s most timely topics in stock and executive compensation; check out the full agenda and register today!

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August 29, 2016

NASPP Chapter Meetings

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

Houston: J.D. Ivy and Mindy Davidson of Alvarez & Marsal present “What You Need to Know Now About Equity Compensation.” during the August Luncheon. (Wednesday, August 31, 12:00 p.m.)

Wisconsin: Peter Klinger of BDO presents “Buh Bye APIC Pools: Update on FASB Rule Changes to Equity Compensation Accounting.” (Wednesday, August 31, 11:45 a.m.)

DC/VA/MD: Emily Cervino of Fidelity Stock Plan Services and Julia Franke of Radford present “Turning Up the Heat with Hot Topics in Equity Compensation.” (Thursday, September 1, 3:15 p.m.)

Orange County: Raul Fajardo of Certent and Ken Stoler of PwC present “Simple But Complex ASC Topic 718 Updates (aka ASU 2016-09).” (Thursday, September 1, 9:00 a.m.)

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August 25, 2016

Hire Power: Managers Reveal their Hiring Secrets

Our popular “Meet the Speaker” series, featuring interviews with speakers at the 24th Annual NASPP Conference, is great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.

For today’s “Meet the Speaker” interview, we feature Andrea Best of Stock & Option Solutions, who will lead the session “Hire Power: Managers Reveal their Hiring Secrets

Here is what Andrea had to say:

NASPP: Why is now a good time to talk about hiring and recruitment?

Andrea: In a tight hiring market, such as we are seeing today, recruiting top notch, highly skilled equity compensation professionals can be a much more challenging endeavor than expected. Only adding to that challenge is the fact that making the wrong hire can cost you. The Department of Labor estimates the average cost of a bad hire at about 30% of the employee’s first-year salary. In our industry, that can add up to some serious dollars. That is why successful hiring managers employ innovative tools and strategies to both identify the right fit for their organizations and remain competitive. Of course, robust compensation and benefits packages give you a leg up once you get to the negotiation phase; however, there are many things that managers can do, from the point of assessing their needs and writing up a job description all the way through to making an offer and on-boarding their new hires, that increase their odds of being successful.

NASPP: What is a common mistake companies make when hiring new employees and how can they avoid this?

Andrea: Making the right hire is about much more than just identifying the candidate with the hard skills, or specific experience and expertise, required for success in the job. Given the importance of specialized skills in our industry, a common mistake companies make is selecting a hire based solely on technical skills. However, managers who take the time to assess cultural fit, professional philosophy, and interpersonal skills, such as flexibility, communication, and teamwork, have a much greater chance of hiring and retaining the best fit for their teams. Therefore, thorough preparation for recruiting a new employee ought to include assessing your company and departmental culture as well as defining your management style and the soft skills critical for effective integration into you team.

NASPP: What are some keys to hiring the right people?

Andrea:  Though the hiring process is fraught with challenges and risks, managers can avoid the inherent pitfalls by preparing well and educating themselves on the most efficacious approaches for zeroing in on the best candidate for the role.  Some keys to making the right hire are:

  1. Proper preparation,
  2. Inclusion of key stakeholders and team members,
  3. Leveraging your network,
  4. In-depth interviews,
  5. Cultural fit assessments, and
  6. Providing feedback to candidates throughout the process.

NASPP: What is something people don’t know about you?

Andrea: Many are not aware that I studied and write poetry.  I am currently working on a collection of poems inspired by the universe at the micro and macroscopic levels.  I am especially fascinated by cosmic and quantum phenomena as they relate to the beauty and heartache of human relationships.

Don’t miss Andrea ’s session, “Hire Power: Managers Reveal their Hiring Secrets,” at the NASPP Conference!

About the NASPP Conference

The 24th Annual NASPP Conference will be held from October 24-27 in Houston. This year’s program features close to 100 sessions on today’s most timely topics in stock and executive compensation; check out the full agenda and register today!

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August 24, 2016

NASPP To Do List

Time Is Running Out!
You have just two weeks left to take advantage of the early-bird pricing on the 24th Annual NASPP Conference. The Conference will be held from October 24-27 in Houston. Register today!

New Podcast on Proposed 409A Regs
Our newest addition to the Equity Expert Podcast series features an interview with Mike Melbinger of Winston & Strawn on the newly proposed regs under Section 409A.  Listen to the podcast to find out:

  • How the regs will make it easier to grant to newly hired employees
  • The one thing you should never do with restricted stock
  • Proposed simplifications that will ease adjustment of awards when participants die (and when their beneficiaries die as well)

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

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August 23, 2016

Around the World in 60 Minutes: Key International Updates

Our popular “Meet the Speaker” series, featuring interviews with speakers at the 24th Annual NASPP Conference, is great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.

For today’s “Meet the Speaker” interview, we feature Valerie Diamond of Baker & McKenzie, who will lead the session “Around the World in 60 Minutes: Key International Updates

Here is what Valerie had to say:

NASPP: Why is your session, which is a perennial favorite among Conference attendees, always relevant and timely?

Valerie: As we have seen in recent weeks with Brexit, the geo-political and economic landscape is constantly changing and to stay on top of international equity compliance is challenging.  Baker & McKenzie and E&Y do our best to address the latest changes effecting global equity during our session on international updates.  That said, we never know until the day we present what exactly we are going to cover, so in recent years, we have prepared slides that we end up skipping over, editing or moving to an appendix because they are out of date on the day of the session.  For this reason, it’s important to come to the session; you never know what might be new!

NASPP: What is one best practice companies should implement to keep their global stock plans in compliance with local laws?

Valerie: I recommend that companies have a regular process for staying on top of changes to the global tax and compliance rules.  Tax rules need to be checked at least once per year as rates and requirements change annually. Companies should be aware that not all countries have a calendar year as their tax year, so knowing when the tax year is for the country and making sure that the company checks any changes to the tax requirements taking effect in the tax year is a good idea.  With regard to regulatory issues, I have quarterly calls with clients to go over the new developments effecting their equity offerings and to strategize as to whether the company needs to do something to comply with a new rule now or can wait until the next focal grant or ESPP offering.  Another tip here is to think about whether updates need to go to the board/compensation committee and if so, to time any updates accordingly.

NASPP: What is the silver lining to managing compliance for global stock plans?

Valerie:  It’s never boring.

NASPP: What is your favorite restaurant in Houston?

Valerie: If you like pork, then I would try Underbelly Restaurant.  A couple of my colleagues from our Houston office took me to dinner there and we had a great meal.

Don’t miss Valerie’s session, “Around the World in 60 Min: Key International Updates,” at the NASPP Conference!

About the NASPP Conference

The 24th Annual NASPP Conference will be held from October 24-27 in Houston. This year’s program features close to 100 sessions on today’s most timely topics in stock and executive compensation; check out the full agenda and register today!

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August 22, 2016

NASPP Chapter Meetings

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

San Diego: Lenka Haase and Robert Slaughter of E*TRADE Financial Corporate Services present “Your Equity Awards Under a Hot Iron.” (Tuesday, August 23, 11:30 a.m.)

Pheonix: WEBINAR ALERT! Join John Hammond and Elizabeth Dodge as they discuss “The Future of Stock Plan Education—Using Video to Reach Your Employees.” (Wednesday, August 24, 1:00 p.m. PT)

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August 18, 2016

10 Golden Rules for Global Stock Plan Governance

Our popular “Meet the Speaker” series, featuring interviews with speakers at the 24th Annual NASPP Conference, is great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.

For today’s “Meet the Speaker” interview, we feature Aimee Soodan of Baker & McKenzie, who will lead the session “10 Golden Rules for Global Stock Plan Governance

Here is what Aimee had to say:

NASPP: Why is governance of global stock plans a particularly timely topic right now?

Aimee: Companies are facing increased scrutiny with respect to corporate governance and compensation practices.  Coupled with constantly evolving laws in the U.S. and abroad, this makes for an increasingly complex environment when granting equity around the world.

NASPP: What is a common mistake companies make with their stock plan governance and how can they avoid this?

Aimee: A common mistake I see companies make is being overly zealous with delegations of authority (e.g., delegating authority to make grants under a plan, amend grants, adopt a sub-plan or take other administrative actions).  Without an effective delegation of authority, a company could find itself having to unwind unauthorized actions—resulting in a whole host of legal, tax and accounting issues.  To avoid this, a company should regularly review and refresh on applicable state law requirements in its state of incorporation, its compensation committee charter, SEC rules and plan terms.  (You’ll be surprised how many decisions are supposed to be made by the board of directors or compensation committee!)

NASPP: What is the silver lining here?

Aimee:  Armed with our 10 Golden Rules, companies will be well on their way to good stock plan governance, mitigating risk to the company (and hopefully resulting in a better night’s sleep).

NASPP: What is something people don’t know about you?

Aimee: I’m originally from Albuquerque, New Mexico and Hatch green chile (which is difficult to find outside of New Mexico) is one of my favorite foods.

Don’t miss Aimee’s session, “10 Golden Rules for Global Stock Plan Governance,” at the NASPP Conference!

About the NASPP Conference

The 24th Annual NASPP Conference will be held from October 24-27 in Houston. This year’s program features close to 100 sessions on today’s most timely topics in stock and executive compensation; check out the full agenda and register today!

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August 17, 2016

NASPP To Do List

Conference Hotel Is Filling Up
Don’t wait any longer to register for the 24th Annual NASPP Conference—the Conference hotel is quickly filling up. Register today while rooms are still available.

Attracting Top Talent
Check out Andrea Best of SOS’s new blog in the NASPP Career Center on four ways to attract top talent. Andrea notes that one of the things top performers look for is to know that they can contribute to the organization:

Expect “A” players to inquire about vision and purpose and how they, with their specific skills and experiences, can contribute to the growth and future of your company.

Read Andrea’s blog to find out the other three things top performers look for in an employer.

What Do You Think ISS’s Policies Should Be?
Did you miss the polls about ISS’s 2017 corporate governance policy in last Thursday’s blog?  There’s still time to tell us what you think!

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

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August 16, 2016

Globe Trotting, Equity Compensation Style!

Our popular “Meet the Speaker” series, featuring interviews with speakers at the 24th Annual NASPP Conference, is great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.

For today’s “Meet the Speaker” interview, we feature Aaron Oberg of E*TRADE Financial Corporate Services, who will lead the session “Globe Trotting, Equity Compensation Style!

Here is what Aaron had to say:

NASPP: What is the most critical thing NASPP Conference attendees need to know about administering global stock plans?

Aaron: Administration of a global stock plan can seem overwhelming. There is no doubt that complexity with offering equity in multiple jurisdictions grows exponentially with the number of locations that are added. The constantly changing arena is also hard to keep up with. Our session is designed to break it down into manageable chunks that focus on what you need know and do, as well as how you can do it with tools, partners and processes accessible to you today. We will discuss the complexities, but our goal is to give you practical knowledge on how to apply workable strategies that you can start with today.

NASPP: What is a common mistake companies make when administering their global plan and how can they avoid this?

Aaron: A common mistake we see is inaction or inadequate action caused by fragmentation within a company. This mistake is also one of the easier ones to solve through building a more cohesive cross-functional team. Many times we see that there is not one single group or person that has the entire picture in view. This causes either the lack of implementing any process, or implementing a solution piecemeal that does not provide an optimized process. The most successful engagements we have seen include a combination of collaboration, accountability, and access to tools and resources required for an efficient and controlled operation.

NASPP: What is the silver lining to your topic?

Aaron:  The global landscape is not all doom and gloom, but it can be intimidating. The silver lining to our topic is arguably that equity compensation is becoming more complex and prevalent. While this creates new challenges for stock plan professionals every day, it also makes it more and more visible beyond the industry. This attention to it is making it easier to get the help and backing needed to tackle it all. This can be managed, and we see companies do it all the time.

NASPP: What is something people don’t know about you?

Aaron: Most people don’t know that I originally worked at ski resorts to get through aviation school. However, after I saw the exciting world of equity compensation, I quickly left all that behind for a more fun career in stock plan administration.

Don’t miss Aaron’s session, “Globe Trotting, Equity Compensation Style!,” at the NASPP Conference!

About the NASPP Conference

The 24th Annual NASPP Conference will be held from October 24-27 in Houston. This year’s program features close to 100 sessions on today’s most timely topics in stock and executive compensation; check out the full agenda and register today!

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August 15, 2016

NASPP Chapter Meetings

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

Salt Lake City: Nathan O’Connor and Daniel Hunninghake of Equity Methods present “Current Trends in Stock Compensation: What to Expect in 2017.” (Wednesday, August 17, 12:00 p.m.)

Silicon Valley: Mike Andresino of Posternak Blankstein & Lund, Christine Cognetti McCasland of Morgan Stanley and Melanie Vinson of Workday present “10b5-1 Trading Plans: Recent Survey Results.” (Wednesday, August 17, 12:00 p.m.)

Carolinas: Mark Rosen and Matt Depp of Pearl Meyer present “Trends in Executive Compensation and Long-term Incentive Plan Design.” (Thursday, August 18, 11:30 a.m.)

Denver: Morgan Stanley presents the results of the 2015 Morgan Stanley /Shearman & Sterling 10b5-1 Practices Survey. (Thursday, August 18, 12:00 p.m.)

Kansas/Missouri: WEBINAR ALERT! Please join PwC for the latest global developments affecting us in the equity compensation space, including Brexit. (Thursday, August 18, 9:00 a.m. CT)

New York/New Jersey: WEBINAR ALERT! Please join PwC for the latest global developments affecting us in the equity compensation space, including Brexit. (Thursday, August 18, 10:00 a.m. ET)

San Francisco: Lunch and two presentations! First, Andrea Kagan of Solium Global Compliance Team will break down the black box of regulatory compliance to four key areas—securities law, exchange control regulations, data protection and employment law. Then, John Wolff of GuideSpark  will hold an interactive discussion about communication strategies to better educate your employees about equity compensation. (Thursday, August 18 11:30 a.m.)

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