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Aspirations by Stock & Option Solutions,
Inc.
Nov. 4, 2014
1
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
2
� State of Employee Communication
◦ The Facts
� What are the Participants looking for?
� Best Practices
Aspirations by Stock & Option Solutions,
Inc.
Nov. 4, 2014
2
State of Employee Communication – The Facts
Aspirations by Stock & Option Solutions,
Inc.
Nov. 4, 2014
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5
� 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
Aspirations by Stock & Option Solutions,
Inc.
Nov. 4, 2014
4
7
� 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
8
� 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
Aspirations by Stock & Option Solutions,
Inc.
Nov. 4, 2014
5
9
http://www.ragan.com/InternalCommunications/Articles/Survey_Internal_communicators_dissatisfied_with_me_48321.aspx
9
� New Employees /
Plan Participants
� Ongoing/Mature Participants
� Different Demographic Groups
What are participants looking for?
Aspirations by Stock & Option Solutions,
Inc.
Nov. 4, 2014
6
� 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
Aspirations by Stock & Option Solutions,
Inc.
Nov. 4, 2014
7
• 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
Aspirations by Stock & Option Solutions,
Inc.
Nov. 4, 2014
8
How Do You Deliver Communications To Your Employees?
So many choices!!!So many choices!!!So many choices!!!So many choices!!!
Aspirations by Stock & Option Solutions,
Inc.
Nov. 4, 2014
9
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
18
� 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
Aspirations by Stock & Option Solutions,
Inc.
Nov. 4, 2014
10
19
� Glaxo Smith Kline
◦ “Minisite” with interactive education
19
20
� “Videos” can also be created using PowerPoint!
� Posters!
� Coffee mugs!
� Tchotchkes!
20
Aspirations by Stock & Option Solutions,
Inc.
Nov. 4, 2014
11
21
� 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
2222
� 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
Aspirations by Stock & Option Solutions,
Inc.
Nov. 4, 2014
12
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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
24
� 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
24
Aspirations by Stock & Option Solutions,
Inc.
Nov. 4, 2014
13
White Papers / Guidebooks On-Demand Recordings
26
� 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
Aspirations by Stock & Option Solutions,
Inc.
Nov. 4, 2014
14
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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: robyn.shutak@globalequity.org
Denise Scoville-Glackin
Title: Implementation Manager
Address: 4683 Chabot Drive, Suite 260,
Pleasanton, CA 94583
Bus: (925) 475-4382
Email: Denise.Scoville-Glackin@easiadmin.com
Dee Crosby
Title: Executive Director, CEP Institute
Address: 500 El Camino Real Santa Clara,
California 95053
Bus: 408-554-5305
Email: dcrosby@scu.edu
Aspirations by Stock & Option Solutions,
Inc.
Nov. 4, 2014
15
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