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Year End Checklist: 3 Things to Add

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November 08, 2018 | Jennifer Namazi

Year End Checklist: 3 Things to Add

You may be performing your year-end tasks off of a checklist – after all, year-end only happens once every 12 months. It’s easy to forget everything you did 52 weeks ago to complete one year’s to-dos and prepare for a new season.

If you’re using a checklist already, I applaud you. If not, now is the time to consider creating one to address the many things that need to be done to close out the year. Whether you have a well refined checklist or are just getting started, I offer a few sometimes overlooked items to add to your list.

Changes to Beneficiary Designations

People often look at the New Year as the end of one life chapter and beginning of another. It’s the hands down peak time for taking stock of one’s circumstances and setting goals.  With that mindset already prevalent, it’s the perfect time to remind employees to revisit and refresh their beneficiary designations. I’ve described some of the repercussions of not updating beneficiaries in prior blogs (“Did Steve Jobs Have a Beneficiary?” – October 11, 2011) – and yes, there can be unintended consequences of not remembering or failing to make changes, particularly when life circumstances change (marriage, birth of children, divorce – just to name a few examples).

There is some ongoing discussion as to which forms of stock compensation should consider having beneficiary designations (be sure to consider non-US regulations if implementing them). The bottom line here is that if you offer employees the opportunity to designate a beneficiary, then you should send them periodic reminders to review those designations.

Communication about Availability of Stock Plan Resources

With more and more transactions involving stock plan shares taking place online, it’s easy to forget this one. Automation won’t eliminate all questions, and you and your participants can avoid the stressful situation of trying to find someone on New Year’s Eve day to answer questions about selling stock plan shares. Of course, if you’re in the office that day and readily accessible to answer participant questions – fantastic. But if your stock plan department (especially if it’s a department of one) is planning to work reduced hours during the holidays, make sure the word spreads to participants and come up with a way to address common questions in your absence.

Explain Last Minute W-2 Impacts in Advance

Play this scenario out with me. You have a pay-day on December 31st. You also have restricted stock units vesting that day. In this scenario, the last paystub of the year is likely to be missing the income and taxes for the December 31 vesting, because that data wasn’t available at the time the paystub was prepared. If the event were mid-calendar year, most employees probably wouldn’t notice the delay in information on the paystub. But when it comes to year-end, many people often look at that last paystub to start forecasting tax scenarios. On top of that, if the shares vest on December 31st, they likely won’t be delivered to the employee until January – crossing calendar years. This gap between year-end taxable event in one year, and share delivery in another year can add confusion about in which year the taxable event occurred. This could lead to an unpleasant surprise when the W-2 is received at the end of January. The remedy is robust communication well before year-end that explains how year-end stock plan events will play out on the paystub, share delivery and W-2.

Year-end is a busy time for many of us in stock compensation. Now is the time to begin preparations and incorporate some of these sometimes overlooked items into your checklist.


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