Whether planned or unplanned, retirement prior to age 65 may present an income gap until the qualifying age to receive pensions and Social Security. While stock administrators cannot offer financial planning advice, they need to know how taxation variables impact executives as they draw down company stock from a variety of accounts and compensation plans. The complexity surrounding stock-based compensation clouds the dilemma: Which funds should be drawn from to optimize the performance and minimize the tax consequences?
Employee stock purchase plans (ESPPs) offer great value to employees and help companies broaden their ownership culture. The most favorable plans offer a look-back and a 15% discount, yet according to a recent Fidelity survey, average ESPP participation is just 29%. Read on for 7 tips to improve participation in your company’s ESPP.
The cross-departmental nature of managing an equity plan can make gathering data and keeping up-to-date records a nightmare. There is no time more crucial than year-end to make sure you reconcile equity plan data across all of your internal stakeholders and departments.
Many private company employees holding stock options are looking for tax strategies prior to the company’s public offering. A lesser-known provision for pre-IPO options exercise allows employees holding ISO-options to lock in a lower pre-IPO price in order to minimize ordinary income taxes and start the capital gains period running during the pre-IPO period. Read on for more details surrounding HR 5719.
With the 24th Annual NASPP Conference and Exhibition coming up next week, we wanted to make sure you get the most out of your time in Houston. Attending conferences can be a struggle when trying to choose from a jam-packed schedule full of inspiring breakout sessions and balancing that with authentic, meaningful networking all while maintaining your day-to-day workload. You need to make the most of your time at the conference and here are 7 ways to do it.
Email is often incorporated into a stock plan communication strategy because all employees have an email account, it is inexpensive, and it can be effective. But how can you make sure it is effective? How do you make sure that your participant communications are reaching your audience? Here are 7 things that will make your message jump out of your participant’s inbox and get them to act.
Earlier this year, I was lucky enough to attend the 17th-annual Global Equity Organization conference in Boston. I feel right at home at conferences like this: They are teeming with people who love equity compensation as much as I do. I always look forward to hearing what people are talking about, whether it is in the keynote speeches, the more detailed breakout sessions, or just networking over a lobster roll in the Boston-themed exhibit hall. These conversations give me a glimpse of what the future holds, and when I hear the same topic addressed in a keynote, in a breakout, and in the exhibit-hall chatter, I know it must be a hot topic. So, what’s everyone talking about? Millennials!
A fast-growing medical device company expects to file for an initial public offering (IPO) next year. The company has offered incentive stock options (ISOs) to their executives and these execs now have the opportunity to exercise early, if they choose to. After the IPO, executives will be forbidden to sell during the 180-day lockup period and there will be limits detailing how much company stock an executive can sell all at once. The executives realize that these economic and tax decisions are more complex than those they have had to make in the past.
As part of its Simplification Initiative, FASB issued ASU 2016-09 on March 30, 2016, an update to ASC Topic 718. For public business entities, the amendments in ASU 2016-09 are effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2017 and interim periods within annual periods beginning after December 15, 2018. There are a few key provisions of the new standard, here we will focus on accounting for income taxes and elimination of APIC pool.
A couple of years ago, UBS started a research project called UBS Participant Voice, a series of surveys seeking to canvas the attitudes of stock plan participants toward their equity awards (see our blog commentary on the first survey). The latest survey in the series, which obtained responses from more than 1,000 stock plan participants across a variety of industries, delivers some interesting insights into the value employees both perceive and actually get from equity awards. These insights may be useful both to equity-granting companies and to financial advisors who have clients with stock compensation.