‘Right-Sourcing’ Your Equity Plan Administration

By Donna Bell. Equity plan administration spans accounting, tax, human resources and legal functions. Many companies face the challenge of limited resources and expertise in these areas and turn to outsourcing partners for support. In this blog, we explore which components of equity administration make the most sense to outsource and examine what you can expect from an outsourcing partner.

Stock plan professionals Hats_Outsourcingare responsible for countless tasks and wear many hats. Beyond the day-to-day equity plan management, some of the added responsibilities include:

  • routine reconciliation of monthly activity,
  • accounting for equity compensation,
  • reconciliation of plan reserves,
  • preparation of proxy and other SEC filings.

According to Certent’s Stock Administration Operational Benchmark Survey, 69% of companies polled have a minimal team of one to three full-time employees carrying out these responsibilities. No wonder, equity comp teams are often overworked and find if challenging to keep abreast of fast changing topics.

It’s important to understand that any or all of the above elements can be moved to an outsourcing model. Delegating specific tasks to a qualified provider can be a great opportunity to offload time consuming and manual processes. An outsourcing partner will likely utilize an automated solution which can also insure accuracy and integrity of data and reduce legal and compliance risks.

In our Benchmark Survey we found that companies typically do not outsource 100% of the process. Depending on the company size and the composition of the equity comp team, the majority outsource only a portion of the work that makes the most sense for business, allowing them to also retain some control over the process. The chart below shows the functions that our survey uncovered as most commonly outsourced.


An outsourcing partner can support your plan with dedicated professionals for each element of stock plan management. In some outsourcing arrangements, the subject matter expert can provide training and education not only to your internal team, but to your plan participants as well. A few areas where an outsourcing partner’s expertise can really strengthen your team include:

  • Corporate actions
  • Restricted stock releases
  • Award processing
  • Administrative reporting
  • Interfacing with transfer agent and broker

Outsourcing can provide you with the opportunity to offload resource draining tasks, to better manage cyclical workload, and to focus on more strategic activities. If you are considering outsourcing parts of your equity comp plan, read this whitepaper Is Outsourcing Right for You? to answer five key questions to help you make your decision. Also, visit Equity Management Services to learn more about how Certent can support your needs.

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