August 22nd, 2013
In this issue:
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SOS Employment Opportunities
Aspirations Sponsorship Details
From the SOS Webcast Archive-
Contact Us: 888-SOS-0199
Aspirations Sneak Peek
The much-anticipated session and speaker lineup is in the final stages and we are thrilled to offer a fabulous general session in the morning this year (back by popular demand) and an all-star-studded lunch session. With our exquisite new venue, the spacious session rooms will give everyone a seat with a view. From 8:15am through to the end of the cocktail hour at 6:15pm, this year's Aspirations will wow you with exciting educational sessions, a vendor hall worth lingering in, and free-flowing food and drinks.
This year's schedule is again jam-packed with the best and the brightest speakers and some fascinating new topics including:
Speakers will include presenters from:
Whether you work for a private company now, might someday work for an IPO company, or are just looking for low-cost continuing education credits for attorneys, CEPs, or CPA, this is a conference you won't want to miss. We look forward to seeing you there and please remember to stop by the SOS booth; we have many surprises in store!
Shawna CaseyAssociate Director, Marketing
Stock & Option Solutions
Outsourcing-How It All Comes Together
After visiting and speaking with hundreds of clients throughout the years, the SOS outsourcing team has developed a structure we follow each time we implement a new client. Our goal is to integrate our team and processes around the client while providing consultative expertise to effect positive change. These same methods can be applied when you change positions, either to a new company or to a new role in your organization.
First we meet the internal team; one of the most important factors for success is how well a team works together. By building relationships with your colleagues, you start to learn each personality and their associated expectations. Our goal is to ensure each department knows SOS's role(s) (which vary widely from client to client) and that both the SOS personnel and the company personnel know from whom to collect essential company information. The departments or personnel we try to meet are: current stock plan professional (if available), financial or SEC reporting, human resources, payroll, and legal counsel.
As part of the implementation process, SOS meets with and explains our working relationship to the external partners as well. SOS needs access and authorization for multiple applications. We are set up with your software vendor, brokerage firm, transfer agent, payroll vendor, and/or outside legal counsel. This allows us to help manage and coordinate the stock plans and relevant processes on the company's behalf.
Once we have system access, a review of the current database and historical files is performed to familiarize our team with the company's equity plans. We review the plan documents, grant agreements, special termination agreements, relevant accounting memos, and the data in the equity system to ensure it is consistent with the system settings and parameters. Incorrect settings can cause major compliance and reporting issues down the road if not caught in time. Don't forget to assess how the previous administrator organized the data like employee ID's, department numbers (for expensing), special comment fields, and grant data. You are taking responsibility for the data and should feel confident when you provide reports and analysis from your system. We have seen too many instances where reports have been sent out to management before the necessary adjustments and reconciliations have been performed.
After assessment of the company's data, we review the company's current operations and process flow. Sometimes there is a complete and up-to-date procedures manual, which makes our job easier. In other cases the manual is outdated or non-existent. This is the bulk of the education and due diligence of a company's equity program. The goal here is to understand how stock plan services functions within the company. This will range from defining and documenting the grant, exercise, termination processes as well as understanding the financial reporting, payroll integration, and capitalization table (for private companies) updates. After reviewing the database and relevant documents, we meet again with each department head and ask more questions about their processes. Equity administration varies drastically from company to company, so don't jump to conclusions just because your last company did things a certain way. Don't be too quick to offer best practices until you fully comprehend the current environment as well as the reasons for the current processes.
Finally, develop and document a calendar of events as well as a summary of the above process descriptions and share it with all parties involved. This should include everything from ESPP purchases to RSU releases, to period close due dates and auditor onsite windows. This will help to delineate responsibilities, provide transparency to your team, and publicize when tasks need to get done. As a public company, this is required for Sarbanes Oxley purposes, but even private companies need to be concerned with SOX and will benefit from a detailed and documented process.
Each outsourcing client brings a new perspective and a new set of challenges and relationships from which the entire outsourcing team (and SOS team) learn and grow. Every client and new company can teach us, and you, something new, if you are open to the opportunity.
Henley Hom, CEP
Product Spotlight: Strategic Solutions Analysis & Recommendations
Are your stock plans humming along at maximum efficiency? Are you using the latest and greatest "best practices"? If not, or if you're not sure, SOS's Strategic Team can help! Our five-member team has nearly 100 years of combined experience in equity compensation; we have "been there, done that."
Our Analysis & Recommendations (A&R) service combs through your processes by reading plan documents, reviewing SEC filings, conducting interviews with key personnel and reviewing process documentation. It is not uncommon for us to find inefficiencies, risk factors, and outdated or manual processes that can often be remedied quickly. Depending on project scope and budget, we then provide feedback, either verbally or via written documentation, with recommendations for changes.
If you are unsure as to whether or not your company could benefit from an A&R, contact SOS and discuss your stock plans with our subject matter experts for a quick, high-level assessment.
"Based on our diligence, we expected good things when we engaged SOS, we weren't expecting though how quickly they 'hit the ground running.' Within the first hours of the consulting engagement we were receiving suggestions on process improvements and best practices. Technical support was amazing as answers came before we finished our question, they knew the answer because they had been there before."
Some of the areas we review include:
Personnel Data Management
Grant Recommendations and Approvals
New Grant Processing
Restricted Stock Taxation and Releases
Executives and Section 16 Insiders
Reconciliation and Audits
Provide detailed overview of findings, including program strengths, weaknesses, and additional commentary and discussion covering various issues (Immediate Actions, Compliance, Operations and Process, Staffing and Training, Security and Controls). The report outlines specific items identified in the Analysis phase, SOS-assigned priority level based on risk assessment and effort to correct, control type (preventative or detective), discussion of impact and risk factors, parties involved in correcting the issue, and any recommended follow-up actions to correct the issue.
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SOS Consultant Corner- Loss of a Stock Employee
As manager of your company's Stock Administration group, you feel confident that things are going well. Transactions are being processed in a timely manner, employees are receiving needed communications, financials are updated on time quarterly, and there don't seem to be any compliance issues.
Suddenly, your long-term Stock Administration Manager decides to leave the company. It could be for any of a variety of reasons: a better opportunity, a promotion, maternity leave, ill health, or a disagreement with a colleague or management. That confident feeling you had about the stock group quickly flies out the window, along with your former employee!
Sound far-fetched? Unfortunately, it's all too common! As an equity consultant for Stock & Option Solutions, I walk into situations like this every month. The good news for you is that companies such as SOS can provide you with experienced, qualified equity professionals who will help you out during such emergencies. The less welcome news is that even experienced equity professionals cannot prevent confusion and wasted down time if a company is totally unprepared for the loss of a Stock Administrator.
So what can you do to prepare for the eventual departure of an essential stock employee?
This is all basically Management 101; however, in my experience many managers fail to spend much time on such pro-active planning.
You may think that this is good advice, but you're just too busy to do any of it. One more piece of good news is that equity professionals at SOS are experienced at training employees, documenting equity procedures, and analyzing stock processes. Time and money spent on these management essentials now will save you plenty of time and money later, when you're dealing with the unexpected loss of an employee.Sarah Roberts, CEP
Stock & Option Solutions
Sarah is a Senior Equity Consultant for Stock & Option Solutions. With over 15 years of experience in equity compensation, she has consulted with companies throughout the country, ranging in size from start-ups to Fortune 100. She became a CEP in 2007, and holds an MBA in finance from UCLA.
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|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. |
Stock & Option Solutions | (888)SOS-0199