October 31st, 2012
Volume 5, No. 5

In this Issue:

Conference Recaps

October Market Research Survey

New Tax Reporting for Japanese Employees

Free SOS Educational Webcast - Demystifying and Determining DTA Balances

SOS Product Spotlight: Email Xpress

SOS Across our Desk

SOS Xposé

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From the SOS YouTube Channel:

SOS Stock Plan Portal

Deliver stock plan tax and transactions information, obtain employee consent for electronic 6039 delivery, ESPP enrollment, grant acceptance, all in one place!

SOS Employment Opportunities
From the SOS Library:

5 Most Common ESPP Compliance Errors

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 in Show: Pedigreed Practices for Section 6039 Compliance

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Equity Compensation Projects/Consulting

SOS-TEAM Outsourcing

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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.

Conference Season - SOS Recaps the NECF and NASPP Conferences

This fall has been jammed packed with fantastic stock plan conferences. We recap two of our industry's biggest in this month's Xtra:

NECF, Palos Verdes, September 9th- 12th

In a gorgeous venue, the cream of the crop in equity compensation gathered to mingle, network, gawk at the ocean and pods of dolphins swimming by, and yes, even attend a session or two and actually learn something new.  This year's NECF boasted the largest percentage of issuers at any GEO conference in the history of GEO. The new Executive Director of GEO, Danyle Anderson, seems to be hitting the right notes with her membership and drawing bigger crowds with each successive event.

The conference boasted three separate tracks, one for execs, one for administrators and one for emerging (private) companies. A speed networking event and an issuer luncheon were both well-attended and received rave reviews.

SOS spoke on four panels: 

  • Excel for Stock Plan Administrators (with Rachel Meyers, of ETRADE Corporate Services)
  • Blockbuster - Leveraging Technology to Make Your Communications a Hit Without Busting the Budget (with Stephen Buckhout of Synopsys and Kimberly Steele of First Solar)
  • Risky ESPP Business (with Alison Wright of Baker & McKenzie and Carrie Kovac of Symantec and
  • Tax Accounting Trials & Tribulations: Introduction for Emerging Companies  (with Andy Ryser of Ernst & Young)

The evening events, including a posh opening reception and pool-side barbeque were also beautifully run and packed with networking (and eating & drinking) opportunities.

Overall, kudos to the entire GEO staff and board for a beautiful event, we hope you'll have SOS back next year!

NASPP, New Orleans, October 8th- 11th

The NASPP National Conference returned to NOLA this year to mark and celebrate the 20th anniversary of the largest conference in our industry. With over 50 sessions and well over a hundred amazing speakers, the NASPP conference packed a wallop again this year. 

As usual we had giveaways for a lucky drop at plinko and a big cash giveaway at one of the refreshment breaks. And our own Susan Garvin was available for individual consultations at the newest addition to the exhibit hall: the Ask the Experts booth. The long-standing Internet Café was also replaced with wi-fi throughout the conference, making all attendees lives a little easier.

SOS spoke on four panels: 

  • The Future of Equity Compensation (a keynote session featuring James Humza of Bank of America Merrill Lynch, Kurt Bremer of Morgan Stanley Smith Barney and Jim Wulforst, of E*TRADE Corporate Services)
  • The Mod Squad: A Guide to Modification Accounting for Stock Plan Professionals (with Raul Fajardo of Qualcomm and Kevin Hassan of PwC)
  • Matchmaker, Matchmaker... Make Me a Match: Hiring a "Perfect 10" in a Complex World (with Ingrid Friere of Genentech and Carrie Kovac of Symantec) and...
  • Mythbusters for Stock Plans: What Public Companies Can Learn from Recent IPOs  (with Laura Reis of Zynga, Jacobin Zorin of LinkedIn and Paz Dizon of Tesla Motors)

And last but not least, SOSer Elizabeth Dodge was presented with the NASPP Individual Achievement award for 2012.  Watch the video here.

NASPP 2013 was announced for Sept 23rd - 26th in Washington D.C. See you there!

October 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 10 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!

New Tax Reporting for Japanese Employees

Similar to the revised requirements under Section 6039 here in the United States, the Japan National Tax Agency (NTA) beginning in 2013 is requiring US-based companies who have to report grant and benefit information to NTA for the prior year.  Unlike the United States, the new regulation encompasses all equity grants including options, RSU's, ESPP shares or "any benefit related to the stock price  or other performance indicator of the parent company or an affiliate".  The rules apply to both subsidiaries of US-based companies in Japan as well as Japanese companies that are more than 50% owned by a non-Japanese company.  The NTA needs information including, but not limited to: the name and address of the income recipient, date(s) of income, number or shares or cash amount received, details of the benefit received, details of the "agreement", maximum number of shares exercisable and the name and address of the granting company.  The filing deadline for 2012 is March 31, 2013.

This legislation is likely the latest attempt by the NTA to reign in what is widely perceived as failure to report income from equity based compensation by individuals subject to Japanese taxation.  The new regulations apply to both Japanese-based employees and expatriates.  Although in the past it was the responsibility of individuals to report the receipt of stock-based compensation, this additional reporting will allow the taxing authority to confirm these activities are being reported and presumably follow up on non-compliance.

At my client we are in the process of defining a process to comply with the new regulations, with the help of our outside tax advisors and my local Japanese affiliates.  A suggested next step would be to reach out to those individuals and departments that you will work with at your own company and get the discussion started.




Chris O'Harra,
Senior Equity Consultant
Stock & Option Solutions


Chris O'Harra is a Senior Equity Consultant for Stock & Option Solutions. Chris began working in equity compensation in 2003. Prior to joining SOS, Chris worked as an Equity Compensation implementation manager for a national equity outsourcer and software provider.

Free SOS Educational Webcast:

Demystifying and Determining DTA Balances

November 6th, 2012

Click here to register.

Please join us for our next educational webcast on November 6th at 11am Pacific Time, 2pm Eastern Time.


Have you ever gotten this question from your tax or accounting team: "Can you give me the cumulative/life to date amount of expense booked for all the currently outstanding stock options ?" If not, start getting ready for it since it's coming up for more and more and more SOS clients. This is the tax accountant's way of asking for the data they need to "prove out" or "validate" the Deferred Tax Asset (DTA) balance related to equity in your General Ledger.

Most systems don't have a report that readily provides this number, but it IS something you can do in a spreadsheet (and sometimes in a custom report), generally bringing in data from two to three standard system reports.

Join our expert panel as they discuss the different ways of calculating this balance, the pros and cons of each approach, the data you will need and some gotchas of which you should be aware before you begin your process.

Please consider forwarding this webcast description to your tax department.

(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.)

Product Spotlight: SOS Email Xpress

For all the time we spend communicating with one another, it is still a surprise to most of us that it is so difficult to deliver a clear and concise message to our employees.  A picture may be worth 1000 words, but many of us are not artists. We have to resort to other forms of information delivery while keeping in mind all the influencing factors in delivering information.  One such form of delivery is email and with more people becoming more and more connected via smart-phones and other mobile connection devices, this method continues to reach an increasing population.

The SOS Email Xpress application has been developed to leverage this form of content delivery.  SOS Email Xpress can retrieve data from your stock plan administration system and send customized e-mails to hundreds or thousands of participants with a few clicks.  It also provides you the ability to combine multiple pieces of information intended for one recipient to be included in one email, which can be an issue with a standard mail merge.

SOS Email Xpress allows you to email stock plan communications to your participants Click image for Demo

SOS Email Xpress Features:
  • Emails customizable to your specifications; match or enhnance existing paper communications
  • Retrieves or imports required data from your existing stock plan administration software or platform
  • Email subject and introductory text can be easily customized by the user
  • View / review stock plan data before sending emails
  • Sends e-mails from email address you specify (we recommend you use an alias)
  • Installs on your desktop or network
  • Perfect for:
    • New Award Notices
    • New Option  Notices
    • RS/RSU Release or Delivery Confirmations
    • ESPP Purchase Confirmations
    • Exercise Confirmations
    • Grant Statuses Statements (Grants and ESPP)
    • Pre-vesting Communications
    • Annual Option & Award Summaries
    • Year-end Tax Summaries
    • Disqualifying Disposition Surveys
    • Other custom email formats

SOS Email Xpress Benefits:

  • Save Time: countless hours printing, stuffing, and mailing confirmations & statements
  • Combine Similar Content: one email with multiple communications for the participant
  • Save Money: on printing, paper, envelopes and postage
  • Reduce Risk: Eliminate the danger of manual processes like the risk of a statement being mailed to the wrong participant

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

International Tax Law
A nice presentation from KPMG on new laws around equity compensation taxation in Switzerland.

Domestic Tax Law
We touched on the of the coming changes to the tax code in the last issue of Xtra, especially those related to Medicare.  Fidelity offers a more comprehensive overview of tax changes affecting equity compensation in 2013...From Buck Consultants: IRS clarifies treatment of performance-based restricted stock and
restricted stock units

Alternatives to stock options
Dan Walter discusses Competititve Compensation without Stock Options.

IFRS staff challenges SEC on adoption obstacles.  Those objections were included as part of the final SEC Staff Report on adoption, which was released in July, and can be found here.  The NASPP blog also discussed the SEC report, and its ramifications for implementation, here.

Stock Plan Administration
Group Five released their annual report on stock plan administration satisfaction.  Read more here.

Great information from Baker and McKenzie LLP on global plan design and compliance strategies for ESPP

SOS Xposé

A New Signature... Kenn Lara took a new job at MobileIron as the Compensation & Benefits Philosopher. Julie Vander Veen has a new role at UBS Financial Services Inc. as Executive Director, Head of Corporate Services managing all aspects of service delivery for their equity plan services group.  This includes the client management group, the service delivery team, as well as the implementation group...Karen Moses recently began at Xoom Corporation as Payroll and Stock Administrator...Carmen Elliott has joined the Legal Department as Sr. Manager of Stock Programs at Aruba Networks, Inc...and Collen Ledesma joined the stock plan team at Zynga.

Movin' On Up...Steve Madeira of Equity Administration Solutions, Inc. was recently promoted to Senior Vice President of Client Operations and Quality.

A Walk to Remember... He put a ring on it! Barbara Baksa of the NASPP will be walking down the aisle with her partner of 17 years, Andy Spafford, next summer.

Baby Talk...Jennifer Lopez of Equity Administration Solutions, Inc.  and her husband, Brandon Lopez, are expecting their first child, a boy on Nov. 23rd... Alex Cwirko-Godycki of Radford is a first time dad with a new son. His wife, Michelle, gave birth to Tate on September 7th at weighing in at 7 pounds 8 ounces... Liz Stoudt from Radford and her husband, Rob, are expecting their first child this Valentine's Day and it's a boy!

Industry News...  

SOS announced our merger with Planmosaic

Lena's Dream is well under way and space is filling up.  For more information go to www.lenasdream.org

Palo Alto Networks is rolling out their ESPP to 22 international countries this month!

Fidelity Stock Plan Services...congratulates three new CEPs, Ryan Berger, Adam Caldwell, and Andrea Schussler, contributing to Fidelity's top spot on the CEPI Honor Roll, http://www.scu.edu/business/cepi/cep_honor_roll.cfm .

On October 8, 2012, Solium acquired OptionEase, a provider of applications for fair-market-value accounting and compliance in the United States. Per the press release, "With this move, Solium expands its leadership position in equity administration, offering solutions for everything from early-stage capitalization table management to global stock plan administration." Read the press release.

Global tax mobility from Solium...Solium announces the availability of its global tax mobility feature on Solium Shareworks™. Per Solium, the new functionality enables companies to create rules and rates for jurisdictions where an employee travelled over the life of any grant-based award. These rules and rates are used to calculate the taxable compensation for the jurisdictions in question and allocate taxes accordingly. As with all features in Shareworks, this functionality is available in real time. Please contact Don Drybrough at don@solium.com for more information.

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

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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