failure to communicate? equity plan communications best ... · failure to communicate? equity plan...

Aspirations by Stock & Option Solutions,

Inc.

Nov. 4, 2014

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Failure to Communicate? Equity Plan

Communications Best Practices

Dee Crosby, Certified Equity Professional Institute (CEPI)

Denise Scoville-Glackin, Equity Administration Solutions, Inc.

Robyn Shutak, CEP, Global Equity Organization

November 4, 2014

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� State of Employee Communication

◦ The Facts

� What are the Participants looking for?

� Best Practices


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Nov. 4, 2014

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State of Employee Communication – The Facts


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Nov. 4, 2014

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� Communication is key to a successful implementation

of LTIP and ESPP, but needs to be more on the

corporate radar screen

� Understanding, satisfaction, and participation increase

with higher communication efforts

� Employees and employers are only moderately

satisfied with communication, but the least portion of

budget is spent on communication


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Nov. 4, 2014

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� Moderate satisfaction with communication, even though it is crucial for company success and employee satisfaction

� Moderate overall satisfaction as well as moderate satisfaction with tax treatment and risk profile

� Communication & plan design drive employees’satisfaction, with communication having the bigger impact

� Communication is main driver of employees’understanding of LTIP and thus their satisfaction

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� Unconventional communication measures are rarely

used, but work best

� Traditional communication measures are still

predominant

� Unconventional and innovative communication

methods

◦ Have a positive impact on employee satisfaction

◦ Rarely used until now


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Nov. 4, 2014

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http://www.ragan.com/InternalCommunications/Articles/Survey_Internal_communicators_dissatisfied_with_me_48321.aspx

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� New Employees /

Plan Participants

� Ongoing/Mature Participants

� Different Demographic Groups

What are participants looking for?


Inc.

Nov. 4, 2014

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� Age

� Culture

� Technology comfort zone

� Equity compensation

experience

GroupGroupGroupGroup

Equity

Equity

Equity

Equity

Compensation

Compensation

Compensation

Compensation

Human

Human

Human

Human

Resources

Resources

Resources

Resources

Local Country

Local Country

Local Country

Local Country

Human

Human

Human

Human

Resources

Resources

Resources

Resources

Legal

Legal

Legal

Legal

Managers

Managers

Managers

Managers

Recruiters

Recruiters

Recruiters

Recruiters

Owns communication planOwns communication planOwns communication planOwns communication plan X X

Provides initial details about the Plan to employeesProvides initial details about the Plan to employeesProvides initial details about the Plan to employeesProvides initial details about the Plan to employeesX X

Makes general presentations on the PlanMakes general presentations on the PlanMakes general presentations on the PlanMakes general presentations on the PlanX X X

Communicates information regarding employee Communicates information regarding employee Communicates information regarding employee Communicates information regarding employee

transactionstransactionstransactionstransactions X

Ensures communication consistent with Ensures communication consistent with Ensures communication consistent with Ensures communication consistent with

Company’s overall communication strategyCompany’s overall communication strategyCompany’s overall communication strategyCompany’s overall communication strategy X

Provides Plan summary Provides Plan summary Provides Plan summary Provides Plan summary X X

Educates employees on Insider Trading PolicyEducates employees on Insider Trading PolicyEducates employees on Insider Trading PolicyEducates employees on Insider Trading PolicyX X

Reviews communication to ensure the Company’s Reviews communication to ensure the Company’s Reviews communication to ensure the Company’s Reviews communication to ensure the Company’s

legal responsibilities are met and legal risks legal responsibilities are met and legal risks legal responsibilities are met and legal risks legal responsibilities are met and legal risks

addressedaddressedaddressedaddressedX

Communicates Awards to employeesCommunicates Awards to employeesCommunicates Awards to employeesCommunicates Awards to employees X X X X

Answers general questions regarding the PlanAnswers general questions regarding the PlanAnswers general questions regarding the PlanAnswers general questions regarding the PlanX X X X X

Facilitates communication with nonFacilitates communication with nonFacilitates communication with nonFacilitates communication with non----US employeesUS employeesUS employeesUS employeesX

Source: CEPI GPS: Participant Education and Communication. Used with permission


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Nov. 4, 2014

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• Communication mediums

• How to deliver communications –

creatively!

• Dos and Don’ts

Best Practices

An effective communication strategy needs to include a number of

integrated tactics:

Collateral Collateral

ServiceService

Posters, offer sheets, and emails are just a few examples of

collateral that can be used to communicate your message.

Providing employees with different ways to access assistance can help

drive engagement.

How to Deliver Communications


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Nov. 4, 2014

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How Do You Deliver Communications To Your Employees?

So many choices!!!So many choices!!!So many choices!!!So many choices!!!


Inc.

Nov. 4, 2014

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INFORMATION TO BE COMMUNICATEDINFORMATION TO BE COMMUNICATEDINFORMATION TO BE COMMUNICATEDINFORMATION TO BE COMMUNICATEDWRITTEN/WRITTEN/WRITTEN/WRITTEN/

HARD COPYHARD COPYHARD COPYHARD COPYEMAILEMAILEMAILEMAIL VERBALVERBALVERBALVERBAL ONLINEONLINEONLINEONLINE

Award AgreementAward AgreementAward AgreementAward Agreement 24% 22% 1% 85%

Plan ProspectusPlan ProspectusPlan ProspectusPlan Prospectus 15% 18% 0% 96%

Exercise procedures for stock optionsExercise procedures for stock optionsExercise procedures for stock optionsExercise procedures for stock options 20% 35% 28% 89%

Tax withholding processTax withholding processTax withholding processTax withholding process 21% 44% 25% 72%

Types of communications the employee will receive for tax Types of communications the employee will receive for tax Types of communications the employee will receive for tax Types of communications the employee will receive for tax

filing purposesfiling purposesfiling purposesfiling purposes43% 47% 20% 60%

Procedures for opening a stock plan brokerage account Procedures for opening a stock plan brokerage account Procedures for opening a stock plan brokerage account Procedures for opening a stock plan brokerage account

and working with a companyand working with a companyand working with a companyand working with a company----designated broker or thirddesignated broker or thirddesignated broker or thirddesignated broker or third----

party administratorparty administratorparty administratorparty administrator17% 65% 20% 80%

Details regarding payments of dividends and dividend Details regarding payments of dividends and dividend Details regarding payments of dividends and dividend Details regarding payments of dividends and dividend

equivalentsequivalentsequivalentsequivalents35% 44% 14% 75%

Statement summarizing the exercise of optionsStatement summarizing the exercise of optionsStatement summarizing the exercise of optionsStatement summarizing the exercise of options and and and and the the the the

release of shares for restricted stock and RSUsrelease of shares for restricted stock and RSUsrelease of shares for restricted stock and RSUsrelease of shares for restricted stock and RSUs40% 47% 1% 77%

When employees can expect to receive the stock and When employees can expect to receive the stock and When employees can expect to receive the stock and When employees can expect to receive the stock and

where the shares will be depositedwhere the shares will be depositedwhere the shares will be depositedwhere the shares will be deposited18% 67% 23% 53%

Impact of change in statusImpact of change in statusImpact of change in statusImpact of change in status 45% 42% 24% 45%

Notification of expiring optionsNotification of expiring optionsNotification of expiring optionsNotification of expiring options 27% 73% 19% 48%

How employees can benefit from equity awardsHow employees can benefit from equity awardsHow employees can benefit from equity awardsHow employees can benefit from equity awards 25% 43% 38% 67%

Advantages and disadvantages of 83(b) electionsAdvantages and disadvantages of 83(b) electionsAdvantages and disadvantages of 83(b) electionsAdvantages and disadvantages of 83(b) elections 19% 38% 29% 52%

Guide to HowGuide to HowGuide to HowGuide to How----totototo----ReadReadReadRead----aaaa----StatementStatementStatementStatement 26% 32% 8% 84%

Impact of market fluctuation during the processing of the Impact of market fluctuation during the processing of the Impact of market fluctuation during the processing of the Impact of market fluctuation during the processing of the

award vest/release/exerciseaward vest/release/exerciseaward vest/release/exerciseaward vest/release/exercise22% 33% 29% 49%

Information regarding subsequent stock salesInformation regarding subsequent stock salesInformation regarding subsequent stock salesInformation regarding subsequent stock sales 39% 35% 15% 74%

Source: CEPI GPS: Participant Education and Communication. Used with permission

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� Retail chain

◦ Communicated ESPP open enrollment via scrolling text on the

cash registers

� Videos

◦ Can be FREE (or very low cost) websites

◦ Production

companies abound

◦ 3921 example

video1.mp4


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Nov. 4, 2014

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� Glaxo Smith Kline

◦ “Minisite” with interactive education

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� “Videos” can also be created using PowerPoint!

� Posters!

� Coffee mugs!

� Tchotchkes!

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Nov. 4, 2014

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� Gilead

◦ Hands out “scratcher” tickets in new hire orientation at the

end of stock plans session

◦ Provides a “business

card” with contact info

for stock plan services

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� Starbucks

◦ All “partners” get awards

called “Bean Stock”

◦ Uses Facebook to

communicate deadlines,

announcements, etc..

◦ Contest to see how many brokerage accounts could be opened

in a specific amount of time


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Nov. 4, 2014

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� Top 10 Best Practices1. Use multiple channels

2. Use the train-the-trainer approach

3. Segment communications based on plan, participant profile, location and also financial literacy of your employees

4. Be careful with new and creative communication measures

5. Keep a consistent message and branding

6. Localize, localize, localize

7. Establish clearly defined success measures

8. Center communications on the overall participant experience and address the desired action you want taken

9. Time communications with plan or life events

10. Solicit feedback on communications specifically

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� Section 16 Officer and Executives can be even worse

◦ Scott Griffith, CEO of Zipcar

� January 2, 2013 Avis agrees to buy Zipcar for $500 million.

Requires shareholder approval

� January 4, 2013 – Twitter post “@bostonglobe weighs in on the

revolution we started at @zipcar http://b.globe.com/130ybZW”

� January 4, 2013 – Zipcar legal department scrambles and files an

8-K to disclose the Twitter post

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Nov. 4, 2014

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White Papers / Guidebooks On-Demand Recordings

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� www.easiadmin.com

� http://www.scu.edu/business/cepi/gps_published_res

earch.cfm

� http://www.globalequity.org/geo/

� http://www.stockandoptionsolutions.com/screens/SOS

-Solutions/SOS-Aspirations-Conference-2014.aspx


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Nov. 4, 2014

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Robyn Shutak, CEPTitle: Senior Director, Programs and Member ServicesAddress:1442 E. Lincoln Ave. #487, Orange CA 92865Bus: 714-630-2908 #103Email: [email protected]

Denise Scoville-Glackin

Title: Implementation Manager

Address: 4683 Chabot Drive, Suite 260,

Pleasanton, CA 94583

Bus: (925) 475-4382

Email: [email protected]

Dee Crosby

Title: Executive Director, CEP Institute

Address: 500 El Camino Real Santa Clara,

California 95053

Bus: 408-554-5305

Email: [email protected]


Inc.

Nov. 4, 2014

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