Equity compensation is an essential tool for attracting and retaining top talent and motivating employees to think like shareholders and share in the long-term value they help create. Unfortunately, the accounting and reporting requirements of these programs can also make for an intensive reporting burden. Read on for a few best practices to minimize the financial reporting hurdles of share-based compensation.
As the Director Education and Product Enablement at Certent, I get great satisfaction at the end of a week of Certent XBRL training. I know attendees will walk away with a greater understanding of XBRL and valuable time with the experts. Most importantly, they will be setup for XBRL tagging success, as training is an instrumental part of becoming a educated user of any system.
The myriad of day-to-day responsibilities associated with stock plan management can make it impossible for administrators to put aside time to document processes and procedures. But, providing clear direction and eliminating any ambiguity within your equity program is invaluable to the success of your plan. Beyond providing your auditor with assurance that appropriate controls are in place, documenting procedures will also facilitate easier training of new team members, improve efficiency and productivity and serve as a resource if there is an extended leave of absence on your team.
To assume that the stock plan participants at your company come to the table with a basic knowledge of equity compensation would be an irresponsible assumption. Even the most straight forward of equity award plans can be complex to employees. Ensuring that your participants are armed with a base line of equity knowledge, including key terms and an understanding of the value of equity, will lay the foundation for clear communication throughout the life of the grant.
If you’re a finance professional, the terms “quarter-end” and “year-end” will evoke a certain emotional response. The quarterly fire drill of gathering documents from different departments with deadlines looming, compounded by the high stakes of ensuring compliance with the SEC is enough to make you pull your hair out. Your company’s disclosure documents tell the world your company’s financial story, and as the author you want to be sure the message is being conveyed clearly. A disclosure management platform allows greater collaboration with team members, control over your data and eliminates the manual processes associated with 10Q, 10K, and more.
The use of mandatory post-vest holding requirements on restricted stock awards and restricted stock units (“RSUs”) is increasingly prevalent as companies search for ways to strengthen the link between compensation and shareholder interests. Mandatory holding periods typically prevent employees from selling vested equity until additional requirements are met— usually “owning” shares for one, two or three years following the original vesting date. And in some cases, holding periods can stretch until retirement.
Developing a truly efficient administrative process doesn’t happen overnight. There is quite a bit of planning and practice involved to create a well-oiled machine. From internal reporting to gathering grant approvals and maintaining recurring employee communications, every company has a different formula to manage these processes. Industry events and networking with peers provide stock option administrators the opportunity to gather best practices and helpful tips to fine-tune your method, increase efficiency and decrease pain points.
On March 25, 2015, the Securities and Exchange Commission adopted final rules that will enable smaller companies the opportunity to generate additional capital. Often referred to as Regulation A+, these new rules are an updated and expanded version of Regulation A, and provide companies a workable path to raising additional capital without sacrificing protection of the investor.
If you weren’t able to attend our annual user conference, the 2015 Certent Summit, we missed you! The event was filled with hot topics, product training, highly sought after keynote speakers and once-in-a lifetime evening entertainment at Walt Disney World©, The Most Magical Place on Earth. Wednesday began with a full day of pre-conference training sessions. Clients who joined us a day early participated in sessions like In-Depth Reporting & Employee Withholding Taxes and XBRL Bootcamp.