The NASPP Blog

Monthly Archives: July 2014

July 31, 2014

Share Ownership Guidelines: How to Handle this Governance Golden Child

Our popular “Meet the Speaker” series, featuring interviews with speakers at the 22nd Annual NASPP Conference, is a 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 Geoff Hammel of ISP Advisors, who will lead the session “Share Ownership Guidelines: How to Handle this Governance Golden Child.”  Here is what Geoff had to say:

NASPP:  Why is your topic particularly time right now?

Geoff: In our post-Sarbanes-Oxley, post Dodd-Frank world, getting governance right is no longer a “nice to have.”  Rather, it’s a necessary element of corporate survival.  By ensuring alignment of executive interests with those of shareholders, share ownership policies (share ownership guidelines + share retention requirements) represent a critical tool in a company’s corporate governance arsenal.  And while the prevalence of share ownership guidelines has remain fairly steady over the past five years, the use of share retention requirements as an enforcement mechanism has more than doubled during this same period.  This added wrinkle of share retention can add layers of complexity to the issuer/vendor relationship and is one of many administrative challenges we’ll be covering in our session.

NASPP:  What are some best practices companies should implement?

Geoff: Many executives and Board members are starved for information about their share ownership guideline compliance status.  Frequent questions include:  What are my requirements?  Have I met them?  What happens if I sell after an upcoming vesting?  While measuring compliance with share ownership guidelines is most commonly a once-a-year process, we find that leading companies take a more holistic, ongoing approach to bridging potential knowledge gaps among its executive and Board populations.  Some companies have created modeling tools demonstrating the compliance impact of anticipated sale transactions.  Others have incorporated ownership guideline “chats” as part of the pre-clearance process.  But one theme that runs central through these best practices is that of more frequent, more expansive communications efforts.

NASPP:  What is a common misperception about your topic?

Geoff: With many companies trading at or near all time highs, share ownership guideline (SOG) compliance is a complete non-issue.  To which JFK may have responded—”the time to repair the roof is when the sun is shining.”  As we’ll highlight during our session, even the most basic SOG design can present formidable tracking and communication challenges.  Add in the fact that markets often fall faster than they rise and you have a compelling case to ensure your SOG compliance house is in order.

NASPP:  If you had a store on Etsy, what would you sell in it?

Geoff: Rainbow loom bracelets.  I’ve been classically trained by three of the best U10 loomers around.

Don’t miss Geoff’s session “Share Ownership Guidelines: How to Handle this Governance Golden Child” at the NASPP Conference!

About the NASPP Conference
The 22nd Annual NASPP Conference will be held from September 29-October 2 in Las Vegas. This year’s program features 60+ sessions on today’s most timely topics in stock compensation; check out the full agenda and register today!

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July 30, 2014

NASPP To Do List

Earn More
In her newest blog in the NASPP Career Center, Andrea Best of SOS offers four steps to earn more this year.

New Equity Expert Podcast
The newest installment in the NASPP’s Equity Expert podcast series features an interview with Paz Dizon of Tesla. Check it out today!

NASPP Focus Group
The NASPP is looking for a few individuals to provide feedback on our new Conference app.  Participants will be asked to complete several tasks within the app and provide feedback on how the app performed.  We expect that this process will take a couple of hours, at most.  Space in the focus group is limited; apply here. You must be registered for the NASPP Conference to participate in the focus group.

To Do List Here is your NASPP to do list for this week:

 

– Barbara

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July 29, 2014

Boston/CT Regional Conference

The Boston and Connecticut chapters recently hosted their 6th annual regional conference.  I wasn’t there, but Jen Baehr, the NASPP’s Programs Director was and she had her camera, so for today’s blog, I have a few pictures of the event.

audienceIn the six years that the chapters have hosted the event, it has grown considerably in popularity.  You can see by this pic that attendance was close to standing room only this year! I’m not saying that people were scalping tickets outside, but there are practically more empty seats at a Red Sox game.

networkingLocal chapter events like this are a great opportunity to meet and catch up with other stock plan professionals in your area. Here attendees mingle between sessions.

Boston Board Kudos to both chapter boards for hosting a great event. In this pic we have Mike Albert of Fidelity and president of the Boston chapter with Boston chapter board members Nancy Kennedy of Boston Scientific, Laurie McCarthy of Sensata Technologies, and Brian Schulz of Morgan Stanley.

CT boardAnd the CT chapter board: Joe Purdy of Solium and president of the CT chapter with CT chapter officers Susan Dixon of Finn Dixon & Herling, Heather Royce of The Priceline Group, Don Gillotti of EASI, Jen Baehr of the NASPP, and Edi Abbott of Equitycomp Associates.

Tami Bruce JenTami Bohm of Radian (and NASPP Regional Representative for the Eastern chapters) catches up with Bruce Brumberg of myStockOptions.com and Jen Tardif of Solium.

sponsorsA big thank-you to the sponsors, who made it possible for the chapters to offer this event at no charge to attendees.

See more pics of the Boston/Connecticut Chapters Regional Conference on the NASPP’s Facebook page. While your there, you can also check out the pics from last week’s San Francisco Chapter Not Quite Half-Day Meeting.

– Barbara

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July 24, 2014

Equity in Sales Force Compensation

Our popular “Meet the Speaker” series, featuring interviews with speakers at the 22nd Annual NASPP Conference, is a 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 an interview with Reese Bacon of BDO, who will lead the session “The Role of Equity in Sales Force Compensation.”  Here is what Reese had to say:

NASPP:  What is the most critical thing NASPP Conference attendees need to know about using equity in sales compensation?

Reese: Equity can be a very effective reward element for sales professionals.

NASPP:  What common mistake do companies make when offering equity to sales professionals and how can they avoid it?

Reese: A common mistake is not considering equity within the whole framework of the reward structure and not clearly specifying what objectives equity is to play.

NASPP:  What is the worst horror story you can tell about equity used in sale compensation?

Reese: Post-IPO companies losing key talent because equity packages were too rich.

NASPP:  If you had a store on Etsy, what would you sell in it?

Reese: I wouldn’t sell it but I would give away free inspiration, joy, and hope for anyone needing it that day.

Don’t miss Reese’s session “The Role of Equity in Sales Force Compensation” at the NASPP Conference!

About the NASPP Conference
The 22nd Annual NASPP Conference will be held from September 29-October 2 in Las Vegas. This year’s program features 60+ sessions on today’s most timely topics in stock compensation; check out the full agenda and register today!

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July 23, 2014

NASPP To Do List

Quick Survey on Mobile Employees
The NASPP and Morgan Stanley are pleased to announce a joint survey on tax compliance for mobile employees.  Take this quick survey today.  The survey has only 13 questions; you can complete it in less than ten minutes—do it today, before you forget.  The deadline to complete the survey is July 25, 2014.

NASPP Focus Group
The NASPP is looking for a few individuals to provide feedback on our new Conference app.  Participants will be asked to complete several tasks within the app and provide feedback on how the app performed.  We expect that this process will take a couple of hours, at most.  Space in the focus group is limited; apply here. You must be registered for the NASPP Conference to participate in the focus group.

To Do List
Here is your NASPP to do list for this week:

 

– Barbara

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July 22, 2014

ISS Rethinks Equity Plan Policy

I’ve told you to complete the ISS policy surveys in the past and I’m sure a lot of you have scoffed.  But this year is different; this year, you might want to think twice about blowing off the survey. ISS has announced that they are considering a significant shift in how they evaluate stock compensation plans. The ISS Policy Survey is your opportunity to give ISS some feedback about how you think they should be analyzing your stock plans.

New ISS Policy on Equity Plans?

According to a recent posting in Tower Watson’s Executive Pay Matters blog (“ISS 2015 Policy Survey — Expanded Focus on Executive Compensation,” July 21), ISS has stated that it is considering using a more “holistic, ‘balanced scorecard’ approach” to evaluate equity plans.  The good news is that this might allow for a more flexible analysis, rather than the very rule-based, SVT and burn rate analysis ISS uses today.  But, as the Towers Watson blogs points out, it also might result in a less transparent process. Less transparency equates to less confidence in how ISS will come out on your plan when you put it to a vote (and perhaps also more business for ISS’s consulting group).

The 2015 Policy Survey

ISS uses policy surveys to collect opinions from various interested parties as to its governance policies. Corporate issuers are one of the many entities that are encouraged to participate in the survey.  This year’s survey includes several questions on equity plans, including what factors should carry the most weight in ISS’s analysis: plan cost and dilution, plan features, or historical grant practices.

There’s a good chance your institutional investors are participating in the survey; don’t you want ISS to also hear your views on how your equity plans should be evaluated?

What Do You Think?

Say-on-Pay and CEO Pay

The survey also includes several questions on CEO pay (that ultimately relate to ISS analysis of Say-on-Pay proposals), including questions on the relationship between goal setting and award values and when CEO pay should warrant concern.

Completing the Survey

You have until August 29 to complete the survey.  There may be questions in the survey that you don’t have an opinion on or that aren’t really applicable to you as an issuer–you can skip those questions.  But don’t wait to complete the survey, because I’m pretty sure the deadline won’t be extended.  On the positive side, however, the survey is a heck of a lot shorter than the NASPP’s Stock Plan Design and Administration Surveys.

– Barbara

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July 21, 2014

NASPP Chapter Meetings

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

Austin: Tony Eppert of Winstead Attorneys presents “Top 15 Compensation Concerns of Executives.” (Tuesday, July 22, 11:30 AM)

Chicago: Bill Gerek and Dana Martin of Hay Group present findings from the Wall Street Journal/Hay Group 2013 CEO Pay Study. (Tuesday, July 22, 7:30 AM)

KS/MO: Keyoor Mankad of My Equity Comp and Brian Stovall of Fidelity present “Working with Vendors.” (Wednesday, July 23, 11:30 AM)

Ohio: Nicole Dmitruchina or EASi presents “The Treatment of Equity Awards upon Termination.” (Thursday, July 24, 11:30 AM)

San Francisco: The chapters hosts a Not Quite Half-Day Summer Meeting, featuring three presentations:

  • “What an IPO Means for Equity Compensation: Tips and Traps on Preparing For and Adjusting To the Public Market” by  Laura Fahnlander of Veeva Systems and Megan Arthur of Cooley
  • “Wikis and Tweets and Blogs. Oh My!” by Dee Crosby of the CEP Institute and Terri Griffith of the Leavey School of Business at Santa Clara University
  • “Fine Tuning Your Stock Admin Engine” by Emily Cervino of Fidelity, Barbara Baksa of the NASPP, and Michelle Giampaoli of ServiceNow

The event will conclude with a cocktail reception. (Thursday, July 24, 1:30 PM)

I hope to see everyone at the San Francisco meeting!

– Barbara

July 17, 2014

Key International Updates

We are excited to bring our popular “Meet the Speaker” series back to the NASPP Blog, featuring interviews with speakers at the 22nd Annual NASPP Conference.  This is a 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 an interview with Valerie Diamond of Baker & McKenzie, who will lead the session “Key International Updates.”  Here is what Valerie had to say:

NASPP:  Why are global updates particularly timely right now?

Valerie: Just about every company is global these days.  Companies are growing into new locations at a faster pace than ever before and there is a real need to stay on top of the securities laws, exchange controls and tax issues.  The tax authorities in Ireland, UK, Hong Kong and Australia are not willing to overlook a US company’s ignorance of tax obligations.  We are also seeing companies penalized by the China SAFE exchange control authorities and the Philippines securities authorities for not registering their plans.  Key international updates is a critical session for any company that is global—whether they have operated for 10 years or 10 days.  The rules change all the time and this session will walk you through those changes and make sure that you get some real insights from the global practitioners at Baker & McKenzie and Ernst & Young as to how to manage global equity compliance.

NASPP:  What are some best practices companies should implement for their global stock plans?

Valerie:

  1. Consider a global form of award agreement—and by that, I mean one that covers all countries you offer equity in, not a separate form for each country.  The reason—employees move over the life of the equity award and you really need to make sure that your agreement is drafted to take that into account.  Plus, it’s a whole lot easier to administer.
  2. Do a quarterly assessment of any new tax or legal developments affecting equity awards and update your agreements and compliance strategy accordingly.
  3. Document what you did to comply with the rules and why and make sure everyone who needs to know, knows what decision was made and why.
  4. Talk to someone who offers equity in a country if you have not granted there before.  There are lots of practical tips that you can get from those who have done it before.

NASPP:  What is the silver lining to global stock plan compliance?

Valerie: The silver lining is that because there are more people granting equity globally, there is a better understanding of how to do it and the traps to avoid.  It’s great to have both Baker & McKenzie and EY speakers on this panel because we are able to cover all of the issues from tax and securities laws to data privacy and exchange controls.  This gives the audience a complete picture of the new developments and good practical tips.

NASPP:  Tell us three things people don’t know about you.

Valerie:

  1. I grew up in Los Angeles, the daughter of two (would-be) actors.
  2. I’m a former professional ballet dancer.
  3. I worked at the Federal Deposit Insurance Corporation as a paralegal prior to attending law school.

Don’t miss Valerie’s session “Key International Updates” at the NASPP Conference!

About the NASPP Conference
The 22nd Annual NASPP Conference will be held from September 29-October 2 in Las Vegas. This year’s program features 60+ sessions on today’s most timely topics in stock compensation; check out the full agenda and register today!

Tags: ,

July 16, 2014

NASPP To Do List

Quick Survey on Mobile Employees
The NASPP and Morgan Stanley are pleased to announce a joint survey on tax compliance for mobile employees.  Take this quick survey today.  The survey has only 13 questions; you can complete it in less than ten minutes—do it today, before you forget.  The deadline to complete the survey is July 25, 2014.

Here is your NASPP to do list for this week:

 

– Barbara

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