April 26, 2011
Volume 4, No. 4

In this Issue:

Equity Comp Building Blocks

Market Research Survey

Free SOS Educational Webcast - Defending, Debunking, Demystifying Diluted EPS: A Plain-English Explanation

SOS Product Spotlight: Customized Payroll Reporting

SOS Archive

SOS Across Our Desk

SOS Xposé

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SOS Xtranormal Participant 6039 Education Videos:

SOS Employment Opportunities
From the SOS Xtra Archive:

A Plethora of Performance Plans

A recorded demo of "Email Xpress", the SOS automated solution for emailing participant stock plan confirmations and statements, is now available:

Email Xpress Demo

From the SOS Webcast Archive

Best Practices for RSUs: Rewards Simplified & Understood

Our Services:


Equity Compensation Projects/Consulting

SOS-TEAM Outsourcing

Contact Us:




Check out the new SOS Website
Ideas or Questions:

Do you have ideas for our next newsletter or webcast? Topics you're dying to see addressed but haven't yet? Please send us an e-mail with your ideas to: xtra@sos-team.com.

Equity Comp Building Blocks

The March SOS educational webcast, The Taxman Cometh, played to the second largest audience we've seen yet. During the rush to meet the new 6039 requirements, our clients looked to us for assistance not only with the creation of participant statements, but with the crafting and inclusion of explanatory cover letters in the packets we sent. We've also been deluged with requests for our existing communication products, like Email Xpress, as well as requests to build customized participant websites and other applications to allow for more effective employee communications.

The increased prevalence of certain corporate events, including IPOs, M&As, changes in equity vendors or systems, and new plan rollouts, as well as a flurry of new (or revised) laws and regulations, are driving successful companies to be more proactive in explaining the significance of these changes to their participant base. This is a worthwhile investment, as it saves the stock plan management team from answering the same questions over and over, and increases participant understanding, which is an undervalued yet critical component of employees' satisfaction with any employee benefit.

At SOS, we continue to do our part by educating the our clients and the community on the changes that affect the way you manage your stock plans. But for equity compensation to reach its potential as a valued and key component of the overall benefits package, companies must also continue to educate on the fundamentals-Equity Compensation 101-so that their stock plan participants can approach changes in the landscape with confidence rather than confusion.

Barrett Scott, Principal,
on behalf of

The SOS Team

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April Market Research Survey

Complete the survey and be entered into a drawing for a $100 Visa gift card!

Periodically, SOS will ask for issuing companies' participation in a market research survey to enhance our understanding of current practices and trends in the industry and to provide our clients insight into the practices of other issuing firms. Our surveys are brief, taking no more than 5 to 12 minutes to complete. Complete the survey today!

Please note that only issuing companies, not vendors or consultants, should complete the survey and are eligible for the drawing. Thank you for your cooperation!

Congratulations to last month's winner, Nancy Theesfield of Tech Data.

Free SOS Educational Webcast

Defending, Debunking, Demystifying Diluted EPS: A Plain-English Explanation

May 24th, 2011

Click here to register.

Please join us for our next educational webcast on May 24th at 11am Pacific Time, 2pm Eastern Time.


Diluted EPS is one of the least understood and most confusing areas of accounting for equity compensation. Yet, when you break it down into its components, the math can be quite simple (something even an English major can do!).

Join our expert panel for a plain-English explanation of the components of this confusing calculation. Learn how to audit the calculations and understand some of the lesser known wrinkles (how can I have negative tax benefit shares? why is that in-the-money option anti-dilutive?). Get a better handle on your diluted EPS number and never let it drive you crazy again.


(One hour of Certified Equity Professional continuing education credit is available for attending. See the CEPI website for more information on CEP continuing education requirements.)

SOS Product Spotlight: Customized Payroll Reporting

The Requirement: Your Payroll department needs to get stock option and award data in a specific format for easier entry into the Payroll system. For example, payroll may require:
Employee Name W2 Income Federal Tax Code Federal Tax State Tax Code State Tax Social Security Tax Code Social Security
Joe Employee 55,000 FED 13750 ST 4400 SS 2310

The Problem: The format Payroll requires is different than that which can be generated by the reports currently available in your Stock Administration software. For example, your stock system may provide something like this:

W2 Income 55,000
Federal Tax 13750
State Tax 4400
Social Security 2310

The Solution: SOS Customized Payroll Reporting

The software provided statements are not always exportable into a format where your Payroll department can easily work with the data. We have all experienced the frustration of being able to see the data that we need, but having the system produce it in a way that requires us to perform multiple manual manipulations to get it into a usable format. SOS can work with you to customize the provided statements to meet requirements from Payroll, resulting in:

  • Ability for other departments to quickly and easily load equity information
  • Increased efficiency of the Stock Administration department, since the manual data work required can be reduced or eliminated entirely
  • Greater accuracy of the data due to decreased possibility of human error which may result from performing manual manipulations. (Possibly fewer corrected W2's as well!)
  • Output can be more easily audited to other files. The closer the customized equity report output matches up to the required payroll data, the easier it will be to compare the payroll files to the stock files to find discrepancies.

SOS provided solutions may range from:

  • Simple customization of an existing Crystal report to convert the data from a vertical format to a horizontal format
  • A little more customization to also include specific payroll codes or other employee data that might be required
  • More in depth customization to combine tax buckets as needed, for example Federal 25% and Federal 35% added into the same Federal output field.
  • Full customization, resulting in report output to exactly match the specifications of your Payroll department

These solutions may be built in various ways and may include the use of customized Crystal reports, the creation of special views in your database, or the use of external tools such as MS Access or SQL. SOS will work with you to determine the best solution to fit your particular needs.

For more information, email us

SOS Archive

In case you missed it, here are links to the March Issue of SOS Xtra:

March 2011 Xtra Newsletter

And don't forget, you can always access our complete archives, with links to every article, from our SOS Xtra Newsletter web page.

We also hosted an SOS Sales Webcast this week highlighting our consulting and technology solutions for spicing up and streamlining your participant communication strategy. Here are the links:


SOS Across Our Desk: Equity Compensation in the News...

Executive Compensation
Looks like some good recent publications from Deloitte on Executive Comp. March articles on "Say on When", "Say on Pay" and the new rules for financial institutions. incentive-based compensation arrangements.

Equity Comp in Private Companies
The the pre-IPO stock option carrot...The U.S. government is reportedly close to changing long-standing laws governing private company stock.

The eternal question
A great blog post on outsourcing vs. in-house administration from the NASPP. We'd also point out that there aren't just three choices, there's an unlimited spectrum of choices, especially if you are an SOS client...

Social Media, for a change
Not equity comp, but a subject near and dear to our SOS hearts - social media communications.

Odds & Sods
A recent NASPP blog covering backdating, auditors, lotteries and employee performance... 12 tips and tricks for Microsoft Excel

Juniper ex-GC ordered to answer SEC's backdating questions...Ernst & Young must face trial for ignoring fraud on Broadcom option backdating.

Want to get these updates as we find them? Follow us on Twitter or become a fan on Facebook.

SOS Xposé

...tender tidbits about people and players in our industry...

Save the date, San Diegans...SOSer Elizabeth Dodge will be in San Diego on May 10th, and will be presenting "Watering Down Diluted EPS: An Interactive Guide to Understanding and Auditing this Calculation" at the San Diego NASPP Chapter meeting...As an added bonus, if any local companies are interested in sitting down with Elizabeth for a free one-hour equity consultation, she would love to meet with you. First come, first served, so please email us if you are interested.

Change in Scenery...Laura Verri has made the move to beautiful Milan, Italy! Ciao! Also Rachel Murillo of the NASPP moved to Boise, Idaho on April 9th. Good luck out there!

New Arrivals...On February 26th, Bill Radtke of UBS Financial Services and his wife had a new baby girl, Gabriella, "Gabby" Marie Radtke. Mom and Dad aren't sleeping much these days, but all is well! Congratulations!

Running Around...Robyn Shutack of NASPP ran her first marathon in January! What an accomplishment this is!

Newly Elected...Nancy Dartez of Prometheus Laboratories has been appointed to the NCEO Board, great job Nancy!

Moving on...Madori Playford of Atheros will be moving to San Diego this summer for a new position after the merger with Qualcomm. Enjoy the beautiful weather!

Love is in the Air...Jon Burg of Radford is engaged. Congratulations Jon!

Industry News...Corey Rosen of NCEO is transitioning to a new role of Senior Staff Member and continuing to work on projects nearly full-time. Loren Rodgers is taking the helm as Executive Director...The Global Equity Organization (GEO) Northern California Chapters are hosting the 2011 California Forum on May 12 at Domenico Wines in San Carlos, California. For more information click here.

Welcome to Spring!

Did you miss an issue of Xtra? View our complete newsletter archive from our new website here
Miss a webcast? You can find links to recordings, as well as the materials, on our Webcast page

Savannah is getting close, and she is big!
Information provided in this newsletter is designed for educational and entertainment purposes only and is not provided as professional service or advice. Moreover, this newsletter should not be relied on as legal, accounting, auditing, or tax advice. Anyone reading this newsletter should not act upon this information without seeking professional counsel and/or input from their advisors. The preceding information does not necessarily represent the official views of Stock & Option Solutions, Inc. with respect to any of the issues addressed.
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