The NASPP Blog

Monthly Archives: May 2013

May 30, 2013

Your Career GPS

Let’s face it: the past few years have been rough for bold career moves. In fact, I think a large population of people have put their long term career plans on hold in exchange for hanging on to what they have. It seems we’re finally emerging from the winter of the stark job market to the flurry of spring. Now’s the time to refocus on your career path and develop your plan.

Last week I blogged about the softer skills that can help you stand out from the crowd. In a follow on to that blog, this week I’ll tackle some of the NASPP resources we’ve made available to our members to assist you in finding the job of your dreams.

Must See Resources

In the past year, the NASPP has moved from having a job bank to a Career Center. We wanted to offer more comprehensive career support to our members, and so far we’ve had great feedback. In case you haven’t familiarized yourself, here are some key Career Center finds:

  • Browse job openings: we currently have 26 job openings, all over the country, posted to the Career Center.
  • Subscribe to the Career Corner Blog, guest authored by Andrea Best, Ph.D. of Stock & Option Solutions. Andrea’s blog will provide lots of tips for finding the right job and honing in on the skills you need in this industry. If you subscribe, you’ll get an email every time there’s a new blog post.
  • Post your resume details. You can be anonymous or not, but if you’re interested in making a career move, why not put your selling points out there?
  • Explore the Career Development page. We’ve got white papers and links to other helpful educational resources.
  • Career Webcast: if you missed yesterday’s webcast on “Finding the Right Job in Equity Comp”, I highly encourage listening to the audio replay (available now) or viewing the transcript (available in 2 weeks). There was so much content packed in to an hour and a half, it’s well worth the time.

For all you visual folks, here’s a screen shot of the Career Center landing page:

Career Center Corner Compressed.jpg

Why not take a few minutes to explore the information available and craft your career goals? After all, “If you don’t know where you are going, you’ll end up someplace else.” – Yogi Berra


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May 29, 2013

NASPP To Do List

Last Chance for Early-Bird Rates!
This is the last week to receive the early-bird rate for the 21st Annual NASPP Conference–we’ve already extended the deadline once, we can’t extend it again.  This year’s program is our best ever; check out all the world-premier panels, then register by May 31–after that, the price goes up!

It’s also the last week to receive the early-bird rate on our newest online program, Advanced Issues in Restricted Stock!  This is the only program available that delves into today’s most sophisticated and technical challenges involved in overseeing restricted stock and unit plans–register today!

NASPP To Do List
Here’s your NASPP “to do” list for this week.

– Barbara


May 28, 2013

NASPP Conference Highlights

I’m excited to announce that the full program for the 21st Annual NASPP Conference is now available and I’m even more excited about the program itself.  Every year, the proposals just get better and better, thanks in part to our Proposal Assistance Program, and this year is no exception. 

If you count all the sessions in the Proxy Disclosure Conference and the Executive Compensation Conference, we are offering over 60 sessions this year!  With that many sessions, it’s hard to pick favorites, but here are the ten sessions I am most looking forward to:

Early-Bird Rate Expires on Friday

The NASPP Conference will be held from September 23-26 in Washington, DC. Registrations are very strong and this is shaping up to be, without a doubt, the premier event in stock compensation this year; you’re going to want to be there. Don’t pay more than you have to for your registration; make sure you register by this Friday, May 31. After that, the price goes up.

 – Barbara


May 23, 2013

The Other Skills You Need

In today’s blog I want to draw attention to some of the other skills you may need to hone in order to be the best version of your stock plan self. For just a moment, I’m not talking about the laws and regulations you need to remember, or the best practices, or the intricate processes. I’m focused on completing the whole you (no, not in the “you complete me” Jerry Maguire form), from a stock plan sense.

4 Skills to Strengthen Your Brand

It’s easy to get caught up in trying to figure out how to tax a performance award in France or withhold supplemental income on a U.S. stock option exercise. Perhaps a part of our mental cycle even wonders if IFRS 2 is coming (or not) and what should be done to prepare. We spend significant time figuring out “things” and solving challenges. From an expertise perspective, that is fantastic and necessary experience. Just for today, though, I want to shift our thinking into contemplating what other skills might be needed to ensure you are the best stock plan professional you can be. On that note, I’ll share 4 areas where you can round out your skills and stand out from the crowd.

1. Enhance Your Writing Skills
: Chances are you have to write employee communications, process documents and exchange emails back and forth with your internal business partners, participant population, and senior management. Nothing stands out more than communications that are overdone, underdone, or just plain confusing. One trick I use when writing a communication is to review it and cross out words that are not “necessary” to the sentence.

For example, instead of saying:

“For more information, please feel free to visit our stock plan intranet site, located in the XYZ portal on our company website.”

Consider saying: “More information can be found in the XYZ portal on our website.”

There’s nothing wrong with the first sentence, except that it’s a bit long and wordy. Too many of those in a row can lose the reader’s interest.

2. Refine Your Grammar:
Here’s a question for you: In the U.S., do periods and commas go inside or outside of quotation marks?

  • Mary said “I like your stock plan process guide.”


  • Mary said “I like your stock plan process guide”.

If you answered “inside,” then you are on your way to becoming grammar guru. Sub optimal grammar skills can weaken your credibility and the ability for others to depend on you. You may only get one chance at your message and it needs to be polished. One of my favorite outside resources to help with the quick or tough grammar question is Grammar Girl. In the middle of writing something? You can look up pretty much any grammar question you may have.

3. Polish Your Presentation Skills:
Whether you are talking to your employees, to other stock plan professionals, or another audience, you’ll want your message to be received in a way that engages the recipient. This is an area where there is so much opportunity to share your message and build your brand. If you have a knack for articulating valuable information, that will help to establish you as an expert in your subject matter. A couple of quick tips to get started:

  • Record yourself doing a presentation. This can be done on your smartphone, computer, tablet or any device with a microphone. Listen to how you present. If you are using lots of “uhs and ahs” or have other little “ticks”, figure out how to obliterate them from your presentation vocabulary.
  • Use stories. Nothing engages an audience more than a great story. Whatever material you have to present, be sure to have plenty of story examples to add color and interest.

4. Plan Your Career Path: Surprisingly, many of us land in stock compensation but don’t plan our navigation from there. The industry is comprised of many moving parts, ranging from issuers, to service providers, to consultants. What’s your ultimate path? I recommend thinking about what skills and experience you may need to acquire along the way and develop goals to get there. Will you need to specialize in something in order to gain the expertise that will give you credibility down the road? Next week we have a great webcast planned on Finding the Right Job in Equity Compensation. In full disclosure, I’m a panelist on that webcast. Let me just say that you won’t want to miss it – there will be tons of information on how to build a career path and your personal brand in this industry.

It’s easy to get caught up in the day to day and forget about the other, softer skills that can make a difference in reaching our full potential. Even if you can’t work on them all right now, pick one to refine and help increase your value as a stock plan professional.


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May 22, 2013

NASPP To Do List

NASPP Conference Program Now Available!
The full program for the 21st Annual NASPP Conference is now available.  This year’s program is our best ever; check out all the world-premier panels, then register by May 31–after that, the price goes up!

NASPP To Do List
Here’s your NASPP “to do” list for this week.

– Barbara


May 21, 2013


Workout Wear, Recalls, and Incentive Compensation

Lululemon, an athletic apparel company, recently received some attention from the media because one of their shareholders (a pension fund) is suing them over an increase to their bonus program that their compensation committee approved just before the company announced a $60 million recall. Emily Cervino of Fidelity forwarded an article (“C-Suite Addiction to Stock Options No Bonus for Shareholders“) on the development to me because she knows of my penchant for both stylish workout gear and stock compensation. It’s rare that I get to combine the two interests.


The author of the article uses the Lululemon story as a jumping off point to lambast stock options, eventually making the statement that “While stock options are a no-lose proposition for those who get them, they are a no-win situation for existing shareholders.”  Which is ridiculous. 

For one thing, as far as I can tell, the suit against Lululemon has nothing to do with stock options. The investors are suing over an increase to the executives’ bonus program, not stock options (the reporter’s tenuous connection is that sometimes incentive compensation takes the form of stock options).  Moreover, stock options most certainly aren’t a “no lose” deal for employees, any more than they are a “no-win” proposition for shareholders. 

In fact, grants of stock options, rather than cash bonuses, might have been a more palatable solution for shareholders in this case.  Unlike bonus plans, stock option payouts are non-discretionary. Either the stock price appreciates or it doesn’t.  The compensation committee can’t decide to just pay out more under the options (setting aside the possibility of repricing).  And if the company announces a major recall just after options are granted, presumably the company’s stock price will decline and the options will be worthless. If the options aren’t worthless, the stock price didn’t decline and investors haven’t lost money as a result of the recall. 

Even if we allow the possibility of repricing, most public companies can’t do that without shareholder approval.  Bonus plans, however, can typically be changed with just compensation committee approval (unless the plan is intended to qualify as performance based compensation under Section 162(m)). 

What Do Responsible Stock Options Look Like?

The conclusion of the article asks readers to comment on how stock options can be structured to reward workers and protect investors, which got me thinking about what responsible options look like for executives. Here are some of the components that I think make for an option program that aligns with shareholder interests:

  • No mega grants.  Small options granted frequently; never more than a single year’s worth of shares in one grant.
  • Appropriately sized options for everyone, execs included.  When granting to execs, the size of grants should be determined based on option fair value, consideration of several possible payout scenarios, and consideration of the amount of wealth the executive has already accumulated through the company’s compensation programs. I know this thought makes me a communist, but really, how much money does one person need?
  • No flipping for executives.  Require executives to fund exercises through netting, sell-to-cover, cash, or other payment methods that don’t require a sale and implement a holding period on the shares issued to the executive.  I’m fine with allowing the rank-and-file to flip, however.
  • Reasonable caps on the option gain for everyone, execs and rank-and-file.  You should really be doing this for full value awards as well.  It’s a smart way to reduce plan expense with minimal to no impact on perceived value.
  • Appropriate clawback policies on shares/gain for execs.
  • No single-trigger vesting acceleration on a change-in-control (for everyone, both execs and the rank-and-file).
  • No repricing of options held by executives.  Only shareholder approved, value-for-value repricing for the rank-and-file, preferably in lieu of that year’s annual grants, with renewed/extended vesting, and cancelled shares that aren’t regranted are retired (rather than returned to the plan).

 – Barbara

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May 16, 2013

Social Media Blessed by SEC

Unless you’ve been under a rock for the past several years, you know that the world of communication as we know it is changing…rapidly. It still amazes me just how small the globe has become with the invent of social media sites like Facebook and Twitter. Information spreads like a wildfire, instantly and with far reach. Finally, the regulatory world is catching up to the new era of information dissemination, starting with the SEC’s recent pronouncement that it’s okay to distribute information to investors through social media channels. I’ll explore the ins and outs in today’s blog.

The Social Media Question

The SEC’s review of social media as a means to communicate started benignly last summer, when the CEO of Netflix posted about a company milestone (exceeding 1 billion video streaming hours in a month for the first time) on his personal Facebook page. The SEC later opened an investigation, wondering if the company was in violation of Regulation Fair Disclosure rules (Reg FD). Essentially, the rule in question requires companies to disseminate information in a way that wouldn’t be expected to give an advantage to one group of investors over another. Usually this is addressed via filing a Form 8-K, or holding an earnings call, and, in some cases, posting on the corporate home page. In essence, investors should know where to look for information, and there shouldn’t be an advantage given to one group over another.

What I find interesting about the Netflix CEO’s post is that he had over 200,000 subscribers to his Facebook page at the time, many of them investors, and the information was probably distributed more quickly than it would have emerged from an SEC filing. Others agree – supporters lobbied the SEC to not pursue charges in this case. Netflix also had maintained that the information was already previously disclosed in a blog on their web site.

The SEC Decides…

Ultimately, the SEC had a “time to get with the times” moment and realized that the present communication reality includes social media, and that companies should be able to use these channels to distribute information. The caveat is that companies need to make it clear to investors which social media sites they will use to share the information. They also need to be wary of making disclosures via an executive’s personal social media page(s). The Netflix CEO was not charged with any wrongdoing.

The SEC’s report into this issue has so far only addressed fair disclosures to investors. However, I think in stock compensation we are also starting to have those “get with the times” moments, as it becomes more apparent that social media is a dominant form of reaching people in our modern era. I’m not suggesting a free-for-all communication campaign via social media, but I am encouraging stock plan professionals to continue to pursue integration of these communication modes into your stock plan communication strategy. I think it’s only a matter of time before these become mainstream in every type of communication campaign.

A Few Tips

If you’re venturing into social media channels to communicate with your stock plan participants, here’s a few things you’ll want to remember:

  • Look for Generation Gaps: While people across all generations have embraced social media, the younger generations have come to rely on it as a primary form of communication. Look at your stock plan demographics – if you’ve got a lot of under 34 year old participants (the largest social media user group is reported to be 18-34 year olds), you should know that email is out and social media is in.
  • Learn the Language: Social media communications should be short, direct and to the point. Forget the formality of email – it may seem like an abrupt change, but those using social media are used to the forward approach. In some cases, your characters are limited (e.g. Twitter – 140 characters) and you have to be short and sweet. Instead of saying “Enrollment time is here! It’s time to enroll in the XYZ Employee Stock Purchase Plan. Enrollment will take place between now and May 31, 2013.”, you’ll need to trim it to something like “ESPP open enrollment now through May 31st.”
  • Check non-U.S. Requirements: When communicating with employees outside the U.S., you’ll want to determine if there are any policies that restrict the use of social media in a particular jurisdiction.
  • Check with Counsel: Do get legal advice before undertaking broad communication efforts using social media. Try to get some guidelines for what types of communications will be ideal for this channel, and which to avoid. For example, maybe it would be good to announce that it’s open enrollment for the ESPP, but it may not be appropriate to announce that stock option grants have been approved. You’ll want to review your specific unique circumstances with your legal advisers.

I look forward to seeing what innovative communications rise out of this next generation of modes and channels.


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May 15, 2013

NASPP To Do List

The NASPP in Cats

I discovered a website that converts any text you enter into cats.  For example, here is how “NASPP” looks if spelled by cats:


I admit that I haven’t quite figured out any more uses for this, but it’s still cool. As a cat owner, I can say that the guy who invented this font either is very patient and has a lot time to stalk his cats with a camera or he has two exceptionally pliable cats.

NASPP To Do List
Here’s your NASPP “to do” list for this week.

– Barbara

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May 14, 2013

Simplifying State Taxes

For those struggling with tracking mobile employees for state tax purposes, there may be a light at the end of the tunnel: the Mobile Workforce State Income Tax Simplification Act. Then again, maybe not…


As my readers know, because we’ve covered this topic ad nauseam here in the NASPP Blog (e.g., see entries on December 13, 2012, December 6, 2012, August 10, 2010, and May 6, 2010) when employees holding stock awards travel from state to state, it may be necessary to allocate the taxable income they recognize upon settlement of their awards to the various states where they provided services during the life of the awards.  This can apply not only to employees that relocate or that live in one state and work in another, but also to employees on assignment and even business travelers. Many states require employees that work as little as one day in the state to pay income tax in that state.  To further complicate matters, the formulas used to allocate the income can vary from state to state. 

With some states (most notably NY and CA, but there are others as well) implementing audit initiatives and actively pursuing enforcement in this area, this issue has moved to the forefront in terms of things that keep stock plan administrators awake at night. 


Given the complexity of the acronym, it’s hard to believe the Mobile Workforce State Income Tax Simplification Act (MWSITSA? mew-sit-sa? really?) is about simplification but there it is, the word “simplification,” right there in the title. The Act would accomplish this by prohibiting states from taxing non-residents that work in the state for less than 30 days during the calendar year.  Moreover, the determination of whether or not the company has to withhold taxes could be based on employees’ expectations of how many days they’ll work in states other than their state of residence (in the absence of fraud, collusion to evade taxes, or some sort of daily attendance tracking system). 

memo from PwC in the NASPP’s State Taxes Portal provides a great summary of the Act (the memo refers to an earlier version of the bill but I believe it is substantially the same as the current version.)

Not So Much?

This would be a big help in terms of business travelers, but there would still be employees on temporary assignment and employees that relocate to contend with. And, even with business travelers, I can imagine plenty of situations where this bill wouldn’t help (e.g., a salesman with an out-of-state territory or a regional division head that spends a lot of time traveling to headquarters in another state).  And the bill doesn’t seem to do anything about standardizing the formula for allocating income among jurisdictions. 

My impression is that, so far, most companies’ compliance efforts have focused on relocations and assignments and that no one has been doing much in terms of compliance for business travelers anyway. But at least if the Act became law, you could cross business travelers off your list of long-term projects–well, as least some of them. 

Which brings us to the $10 million question–will the Act get passed.  I think there’s a good chance that legislation of this sort will be enacted some time during, say, my lifetime (note that I expect that I’ve got at least three or four decades ahead of me). But I’m not holding out a lot of hope for the short term.  The good news is that a version of this bill was introduced into the House last year and passed. Unfortunately it stalled out in the Senate and now we’re in a new session of Congress so it has to start all over again. gives it a 40% chance of making it out of committee but only a 6% prognosis of actually being enacted.  At least there’s hope for our grandchildren…

– Barbara

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