By Josh Feldman. In part one of our series, Effectively Educating Your Stock Plan Participants, an important question was raised – do participants understand the intrinsic value and implications of various award scenarios? In this installment of our series on effective equity plan communication, the focus is on properly notifying plan participants, appropriate check-in times and ways to best disperse notifications along the stock plan process. There are a variety of tactics you can use to engage employees at all stages throughout the process.
Once employees have enrolled, it’s crucial to provide timely information. Actions, milestones and events are excellent examples of ongoing notifications central to an equity plan participant. A few additional events that should yield notifications include vesting completions and blackout periods. These participant announcements are also opportunities to remind employees of the value of their equity awards.
When preparing notifications for plan participants, consider using more than one distribution vehicle to communicate your message. Your equity plan likely encompasses participants across departments, all of which have different communication preferences. Create a strategy of different channels, so all employees are up to date and fully informed.
Don’t forget, communication means more than regurgitating process details – be sure to clearly reinforce objectives and strategies of the plan.
This step is often disregarded, but plays a crucial role in strengthening the motivational power of an equity plan.
Believe it or not, equity awards might not be top-of-mind for most employees, as they represent a relatively small portion of the plan participant’s daily focus. This is easily misconstrued by stock plan administrators who focus such a large part of their time and energy to employee stock plans. Consider adding some reminders along the way for items such as upcoming enrollment dates, deadlines, events and other important timetables. Maybe an email for new grants and awards, but a less formal text message for acceptance deadline alerts. Communication well ahead of deadlines will help reduce expiring awards and employee frustration. Don’t be afraid to host formal sessions once or twice a year. This can be a good way to bring stock plan issues back to the forefront for participants who might have lost sight of the importance of their plan.
Selecting the method and style of communication is an integral element in eliciting the best response from participants. Make notifications easy to find and distribute. Your broker or equity administration platform will offer an on-demand employee portal to house and file both educational information and important dates for each employee. Ensure the portal is always up-to-date and reinforce this hub as the first place employees should look for plan material. An electronic process means documents won’t be lost in a paper shuffle, and by sending out less paperwork, employees are less likely to feel overwhelmed with information.
Equity-compensation plans provide extraordinary value by helping companies recruit and retain top-notch talent. An often missed opportunity lies in the ability to effectively leverage communication to articulate the goals of the program. By using a well-rounded education and notification balance, your employee engagement will thrive. Be sure to check out the first part of our series on equity plan participant communications, Effectively Educate Your Stock Plan Participants – and don’t forget to download the full guide 4 Steps to Elevating Stock Plan Communications.