The NASPP Blog

Monthly Archives: March 2016

March 30, 2016

It’s Here! FASB Issues Update to ASC 718

Just in the nick of time to make their Q1 deadline, the FASB has issued the Accounting Standards Update to ASC 718. Now that the ASU has been issued, companies are free to adopt it.

Here are answers to a few questions you might have:

When do companies have to adopt the ASU?

Public companies have to adopt it by their first annual and interim fiscal period beginning after December 15, 2016. Private companies get an extra year to adopt it for annual periods and an extra two years for interim periods.

Do companies have to adopt the whole ASU at once?

You betcha!  I’ve said it before: this isn’t a salad bar!  You can’t pick and choose the parts of the ASU that you like: it’s all or nothing.

Can we adopt the ASU this quarter even though the quarter ends tomorrow? 

Yep, you sure can.  If you are prepared to change over to the new tax accounting procedures, have already decided whether you want to change how you account for forfeitures (and, if you are changing approaches, are ready to go with the new approach), and are prepared to comply with any other aspects of the ASU that apply to your company, you can adopt it in this quarter. But if you aren’t ready to go on any aspects of the ASU, you might want to wait until at least Q2 to give yourself a little more time.

Do we have to adopt it in this quarter if we want to adopt early? 

No, this is not required. Companies can adopt it in any interim period up until they are required to adopt the update.

Are there any surprises in the final ASU?

Got me.  I’m actually on vacation this week.  I’m at spring training in Phoenix—where ASU stands for Arizona State University and I’m sitting four rows back behind home plate.  I wrote this last week, before the FASB had issued the ASU, just in case.  With the end of the quarter imminent, I wanted to have a blog entry ready to go so that any NASPP members whose employers want to adopt the ASU in Q1 would know that it had been issued.  But I haven’t had a chance to do anything more than skim the ASU between innings.

I plan to have more complete coverage when I’m back in the office next week. For now, go A’s!

– Barbara

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March 29, 2016

Global Grab Bag

As part of an ongoing effort to keep tabs on interesting developments or resources in the area of administering global stock plans, I round up a few of them in today’s blog.

Switzerland in the House

Exciting news on the NASPP front. We’ve added a brand new Country Guide for Switzerland to our Global Stock Plans Portal. If you’ve got (or are considering) stock plan participants in Switzerland, be sure to check out this resource.

Justifying the Value of Stock Plans Globally

Forbes recently posted an article on their site titled “How to Justify the Value of Stock Options to International Employees.” The post, written by the CEO and Founder of Trucker Path, offered an interesting question he uses to gauge whether additional education is needed on stock options when hiring prospect employees. In his own words,

“Another strategy I have found useful is to ask potential hires to rate their salary-to-stock option ratio expectations on a scale of one to five. “One” means they want a high salary compared to the stock amount, and “five” means they want the stock to carry the most weight.

If a prospective employee gives me a rating of “1″ or “2,” this indicates that either they need a better understanding of how stock options work (see above) or that they are not invested in the company.”

For this particular company, one hiring consideration is whether the employee can see the long term vision of the company (and not just dollar signs). However, if they can see the vision, but still prefer a high salary compared to equity, then perhaps that’s a flag that more education around equity may be useful in the hiring process. This is important, because oftentimes companies reserve that education until after an employee is hired. It certainly raises the question about the timing of education in the hiring process and whether sooner may be better in jurisdictions where equity isn’t rampant among employers.

NASPP Global Portal

In the month of March alone, we’ve received alert-material for the following countries (all alert content is available in the NASPP’s Global Stock Plans Portal): Argentina, Australia, Brazil, Germany, India, Ireland, Japan, Romania, South Korea, and Vietnam. Alert content represents new developments in those areas, so if you have stock plan activity in any of those countries, be sure to check out the updates.


March 28, 2016

Las Vegas Chapter Hosts Brewery Tour

The Las Vegas chapter is hosting its first event of 2016.  The meeting features a presentation on “Hitting the Moving Target: Best Practices for Managing Fixed Processes in a Changing Environment” by Lenka Haase of E*TRADE Corporate Services.  The presentation will be followed by a beer tasting and tour of Tenaya Creek Brewing.  (Tuesday, March 29, 5:30 PM)


March 25, 2016

Pay for Pulse No More?

We’ve seen quite a bit of evolution in the mix of equity incentive compensation vehicles and terms over the last decade. The use of stock awards has surpassed that of stock options. Performance based compensation continues on its upward rise towards total prevalence. Another change that has slowly gained traction in the wake of Dodd-Frank, Say-on-Pay, and other measures is what I’m terming a slow death for the time based vesting of options and awards, or, as some call it, “pay for pulse.”

In a recent Equilar blog titled “Companies Just Say No to “Pay for Pulse,” the author cites a recent study of Equilar 100 companies that found 70% of the executive pay mix was “at risk.” In another report (Equilar’s 2015 Equity Trends Report), “nearly 70% of S&P 1500 companies used performance awards in 2014, up from about 50% in 2010.” This is consistent with the trends that we’ve observed as well.

Equilar also suggested that a closer look at LTIPs revealed that performance awards (in the form of units, stock, and options) comprised almost 80% of individual incentive plans. Equity awards that vest over time—or time-based awards—made up the remainder. Additionally, “slightly more than 10% of the Fortune 500—or 51 companies—used performance equity exclusively. The list varied by industry, but notably included multiple energy, retail and media companies.”

We really didn’t need more evidence to know that performance awards appear to have found a long term home in the equity compensation mix. What remains not entirely clear at this point is the fate of time based vesting for options and awards. There is an argument that while performance based incentives work well for executives – those with the most control over corporate decisions and strategy – there may still be benefit to offering time based vesting awards to those farther down in the ranks of the organization where some job functions may be more task oriented and less strategic in nature.

Time will tell whether time-based vesting is on its way out the door, or will stand the test of time (no pun intended) and remain a smaller, but still present, component of company stock plans. Is there still a home for “pay for pulse” in the equity compensation vesting mix?

We have a great webcast planned on the very relevant topic of performance awards and their evolution. On April 7th, Performance Awards: An Ever Changing Landscape will include Jillian Forusz from Adobe Systems Inc., Belen Gomez from Equilar, Dan Kapinos from Aon Hewitt and Robert Purser from E*TRADE. We’ve also got a podcast interview with Belen Gomez from Equilar going up on our website on Monday, March 28th. If you subscribe to the podcast now, you’ll get an email notification when Belen’s interview is up.


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March 22, 2016

Tax Phishing Scheme Targets Payroll, HR

What would you do if you got an email from your CEO, asking you to provide a report of taxable stock plan transactions, including employee IDs—stat? A) Respond with the requested information as quickly as possible or B) forward the email to your IT department for investigation?

As it turns out, B might be the correct answer.

Phishing Scheme Targets Payroll and HR

If you are on the IRS’s mailing list, you know that it’s once again that time of year when the IRS sends out alert after alert about tax phishing schemes.  Most have nothing to do with stock compensation, but a recent alert hits a little close to home.  A new tax phishing scheme targets payroll and HR personnel.  In a phishing scheme, a scammer masquerades as a representative of a legitimate business to trick people into giving out personal information that the scammer can use for illicit purposes.

This phishing scheme involves an email that purports to be from the company’s CEO or other executives and requests that the recipient provide employee data, including personal and W-2 information.

According to the IRS, the email may include the following (or similar) requests:

  • Kindly send me the individual 2015 W-2 (PDF) and earnings summary of all W-2 of our company staff for a quick review
  • Can you send me the updated list of employees with full details (Name, Social Security Number, Date of Birth, Home Address, Salary) as at 2/2/2016.
  • I want you to send me the list of W-2 copy of employees wage and tax statement for 2015, I need them in PDF file type, you can send it as an attachment. Kindly prepare the lists and email them to me asap.


It seems to me that the big giveaway here is the use of the word “kindly” in the above requests. What executive ever used that word when asking for a report ASAP?

Let’s Be Careful Out There

While the schemes don’t yet seem to involve stock compensation, payroll and HR aren’t that far removed from stock plan administration. Some of my readers probably wear both hats.  It’s always a good idea to verify any unusual requests from executives and to make sure that any personal data for employees, including compensation data, is transmitted in a secure manner, especially if that data includes employee identifiers, such as names and ID numbers.

– Barbara

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March 21, 2016

12th Annual CEP and Silicon Valley NASPP Symposium

The CEP Institute and the Silicon Valley NASPP chapter host the 12th Annual Symposium tomorrow, Tuesday, March 22.  Corey Rosen of the NCEO presents the keynote, “Sharing Ownership Widely: What’s Changed, What Works, and What Doesn’t.”  Other topics include accounting for performance awards; mobile employees; death divorce and disability, M&A’s the easy way, innovations in ESPPs, and many more.

I am a co-panelist on the session, “Hot Topics in Equity Compensation” which will be a whirlwind tour of some of today’s hottest issues, including recent Dodd-Frank rulemaking, the ASC 718 simplification project, key trends in performance awards and RSUs, a host of global developments and loads more!  Emily Cervino of Fidelity, Barbara Klementz of Baker & McKenzie, and AmyLynn Flood of PwC present with me—don’t miss it!

I look forward to seeing everyone there!

– Barbara



March 16, 2016

NASPP To Do List

Hot or Not?
Provide your input on topics for the 24th Annual NASPP Conference—complete my “Hot or Not?” poll today.

Double Bonus: Early-bird Rate and Free Conference Audio!
Registration is now open for the 24th Annual NASPP Conference in Houston. Register today and you’ll receive the full Conference audio for free, plus you qualify for the early-bird discount.

How Does Your Stock Plan Stack Up?
Find out by participating in the NASPP/Deloitte Consulting Domestic Stock Plan Design Survey by April 8. Check out the podcasts I recorded on ten things I’m looking forward to finding out from the survey and tips for participating in the survey.

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

– Barbara


March 15, 2016

Hot or Not?

It’s once again time to play the Hot or Not game. I have a list of possible topics for the 24th Annual NASPP Conference; your job is to tell me if each topic is “hot” (or not). Some quick guidelines:

  • Sizzling hot means you’d definitely want to attend a session the topic
  • 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

Create your own user feedback survey

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March 14, 2016

NASPP Chapter Meetings

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

Michigan, Salt Lake City, Twin Cities, and Wisconsin:  The chapters host a joint webinar presented by Bruce Brumberg of on “Tax Return Reporting: What You Need to Know & Communicate With Employees.” (Thursday, March 17, 10:00 AM CT)

San Diego: Ken Stoler of PwC and Raul Fajardo of Certent present “Simple But Complex ASC Topic 718 Updates.” (Thursday, March 17, 11:30 AM)

NY/NJ: PwC will present on tax and accounting practices and the impact on equity plans and current market trends.  (Friday, March 18, 8:30 AM)



March 9, 2016

NASPP To Do List

Double Bonus: Early-bird Rate and Free Conference Audio!
Registration is now open for the 24th Annual NASPP Conference in Houston. Register today and you’ll receive the full Conference audio for free, plus you qualify for the early-bird discount.

How Does Your Stock Plan Stack Up?
Find out by participating in the NASPP/Deloitte Consulting Domestic Stock Plan Design Survey.  This is hands down the industry’s single most comprehensive survey on the design of service- and performance-based awards and stock options. Don’t miss out; issuers have to participate by April 8 to receive the full survey results.  All respondents that complete the survey will be entered into a weekly raffle for a $50 gift card. The earlier you complete the survey, the more chances you have to win!

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