February 28, 2014
Volume 7, No. 1

In this issue:

Tax Time Tips

Disposition Tracking & Reporting- Drudgery or Delight?

Product Spotlight: Disposition Tracking in the SOS Stock Plan Participant Portal

Across our Desk

Free SOS Educational Webcast: Excellence with Excel for Stock Plan Professionals

SOS Xposé

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SOS Employment Opportunities

From the SOS Library:

Summary of IFRS 2

From the SOS Webcast Archive-

Hire Education: A Guide to Hiring Stock Plan Professionals

Our Services: 


Equity Compensation Projects/Consulting

SOS-TEAM Outsourcing

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On our webpage



Tax Time Tips

As the year-end tax reporting for corporations comes to a close, now is the time to anticipate the questions your employees may have for their upcoming personal tax deadline and what you can do to plan for it. We would like to share three tips our consultants have found useful over the years. 

First, be prepared to provide explanations and documentation supporting the income reported on the employee's W-2. Second, understand the limits of what your company is willing to provide in regard to how equity transactions are taxed and reported.  Employees tend to ask additional, detailed questions and you will need to be careful to provide information not advice. Finally, have potential questions documented so you can create an FAQ and/or standard, cut-and-paste responses for all the e-mails or phone calls from your employees.

Hopefully, the work you performed during the year-end audits and reconciliation of W-2 income is reflected in fewer questions from employees.

Henley Hom, CEP, Managing Principal-Outsourcing
Stock & Option Solutions

Dispositions Tracking & Reporting- Drudgery or Delight?

If your company has a qualified Employee Stock Purchase Plan (ESPP) or grants Incentive Stock Options (ISO), disposition tracking is likely already on your list of year-end headaches. It's been on our minds here at SOS lately as well, since a client recently requested we build them a website to do their surveys electronically. They had recently switched from one service provider to another and realized, part way through the conversion, that ESPP shares could not be transferred in bulk between the brokerage firms (service providers vary in what they can do in terms of bulk transfers). They were faced with the prospect of sending paper surveys to literally thousands of participants every year and potentially losing hundreds of thousands of dollars in tax deductions for the company, since participants are notoriously reluctant to complete paper surveys and send them back.

Remember that for ESPP shares, ordinary income from qualifying dispositions must be reported on the employee's W-2 in addition to disqualifying dispositions, so in theory you are supposed to track and report on the shares for the rest of the employee's (or former employee's) life!

Disposition surveys are painful, but you can get creative about solutions without a big budget. The most common way to avoid these surveys is to have your service provider do the work for you. The majority of brokerage firms that deal in stock plans now have automated ways for you to get reports of who has sold ESPP or ISO shares and all the information you need about the transaction in order to do your W-2 reporting. My perfect solution is to require the employee to hold the shares at the designated brokerage firm. For ESPPs my recommendation is that the shares be restricted from transfer forever (even after termination). For ISOs I recommend transfer be restricted for 2 years + 1 day from the grant date and 1 year + 1 day from the exercise date. Many stock plan professionals gasp when I get to the "forever" part of that recommendation, but remember, that a) this is an employee benefit that they received as an employee of the company and b) you're not keeping them from their rightful gains, they can sell the shares at any time, just not transfer them away from the designated broker.

In the NASPP / Deloitte survey from 2011 31% of respondents disallowed transfer of shares away from the designated broker. That's certainly not a majority, but when the idea of disallowing transfer was first introduced, years ago, and the service providers started enhancing their platforms to support the restrictions, the most common reaction I received to the idea of restricted transfers was "What?! We would never do that! That's not employee friendly!". As companies clearly understand and can quantify what's at stake (huge company tax deduction, correct tax report for employees), more and more are likely to jump on the restriction of transfer bandwagon.

Of course this does not solve the issue if you change service providers, and it's definitely something to consider as part of your decision to change providers. Don't let the issue catch you unaware. Plan ahead!

In the ongoing movement away from paper and postal mail, we believe we will see more and more email surveys and online surveys developed and implemented by service providers, consulting firms and even in-house IT groups. In the NASPP/Deloitte survey 20% of companies distributed surveys electronically and 17% had an online survey. I'll bet we see a jump in that number the next time the NASPP includes ESPP in its survey.

Even if you are still tasked with paper surveys (whether to your whole participant base or only terminated employees), consider this inexpensive way to reduce the number of surveys you have to send: for those employees you have an email address for, send them an online survey asking if they've sold (or plan to sell) any company stock this year. If they answer no, that is one less paper survey to send.

However if you are doing your surveys, how do you increase response rates? Consider offering an entry in a raffle for a prize or two, or a cash reward for each form returned. Even something as small as a $25 gift card for a ubiquitous coffee shop can really drive participation. (Note that some legal counsel will have concerns about this approach, so do get with legal before spending too much time pursuing this route and, depending on the size of the prize, you may have to report the prize as part of the winning employees income on their W-2. Another wrinkle here is non-employees, again, the size of the prize may drive whether it's reportable income or not.)

Another possible way to improve return rates on paper or electronic surveys is to educate employees on the benefit to them. ("Yes, it's good for the company, but what's in it for me?") Having an accurate W-2 is certainly a boon when they are struggling with their tax forms or software on April 15th.

Regardless of how you are currently tracking dispositions, keep in mind that all your efforts really do pay off for the company, not only in accurate tax reporting, but also in that glorious tax deduction. And keeping an eye open for new ideas and creative ways to track, survey and incent responses, can only pay off in the long run.


Elizabeth Dodge, CEP, Vice President
Stock & Option Solutions
Elizabeth is the Vice President of Product Management for Stock & Option Solutions, Inc. (SOS). She also runs the Strategic Solutions and Accounting Solutions groups. Her responsibilities include monitoring new developments in the equity compensation arena, performing market research, speaking at industry events and helping SOS clients with all kinds of equity compensation challenges.

Though the SOS Advanced Training Courses in Accounting for Equity Compensation SOLD OUT, we are looking forward to hosting more of the same! Look for information on new session dates soon.

 Become a fan of SOS



Product Spotlight: Disposition Tracking in the SOS Stock Plan Participant Portal

More and more companies are looking for ways to distribute information to their participant base as well as gather information from that same group of individuals.  Many of the online equity systems as well as broker systems provide some of this ability, but sometimes there are scenarios and reasons why utilizing a 3rd party system to either supplement or replace these features may be a better business decision.

As client needs change and evolve, SOS continues to look at ways to enhance our Stock Plan Participant Portal and the latest addition is the Disposition Tracking Module. 

Do you have historical ESPP purchases at a previous broker and your current broker does not provide disposition tracking for those historical purchases?  Do you not have an available broker system or any system that helps in tracking your qualifying and disqualifying dispositions?  Are you looking for a central location for your employees to view corporate documents, accept new grants, view historical transactions and also enter their dispositions?

With the new Disposition Tracking Module of the SOS Stock Plan Participant Portal, you can now accomplish all those goals. As has always been the case, the portal can be customized to the look and feel of your company, it can sit behind your secure firewall or hosted for access on the internet, and it can accept multiple forms of source data to easily work with any stock plan platform allowing you to gather those dispositions.

The above screen is the participant home page that shows all their available purchases.

The above screen is the participant page that shows all their dispositions in a particular purchase.

The above screen is the administrator screen used to view pending batch exports as well as historical batches already exported.
By utilizing SOS's state-of-the art technology, your company will save time, money, and provide excellent customer service to your employees worldwide.

SOS Stock Plan Participant Portal Disposition Tracking Module Features and Benefits:

  • 24/7 access to a secure, customized website
  • Participant access to historical purchases as well as current purchases
  • Participant access to purchases made through different vendors
  • Participant access to view historical dispositions
  • System can calculate estimated W2 income as well as whether the disposition is qualified or disqualified and notify the participant.
  • Participant can easily export their purchase and disposition information
  • Administrator ability to review purchases and dispositions entered into the system
  • Administrator ability to export entered dispositions and marked those dispositions as exported so future exports will only contain non-exported dispositions.
  • Specific email templates to help notify your participant base
  • As well as all the other benefits of the SOS Participant Portal:
    • You can view /review stock plan data retrieved before posting to website
    • Easy-to-understand interface lets your participants find what they are looking for quickly, including historical records
    • Automatic or manual e-mail notifications are sent to the participant letting them know when new data has been posted
    • Links can be posted to educational materials (FAQs, Webinar Recordings) and plan documents, making the website the first stop for any participant with questions
    • Get real-time, comprehensive reports on all employee activity, non-activity, etc.
    • Saves Time: countless hours printing, stuffing, and mailing confirmations & statements
    • Saves Money: on printing, paper, envelopes and postage
    • Reduces Risk: Eliminate the danger of manual processes like the risk of a statement being mailed to the wrong participant

Click here for pricing and information about the SOS Stock Plan Participant Portal


Steve Gaylord, Chief Technology Officer
Stock & Option Solutions
Steve is currently responsible for SOS's project solutions offerings to help clients leverage technology to streamline the stock plan management and administration process. He has more than 16 years experience in the software and services industry, with responsibilities ranging from support, development, maintenance, and training of multiple software packages including financial services, accounting, and customer relationship management. Steve has a B.S. in Computer Science and a Masters in Business Administration from Santa Clara University.


We want your input! Send us ideas on what you want to read and learn about.
Suggestions for articles and webcasts are welcome. Please email us at xtra@sos-team.com.

Across Our Desk

From the NASPP Blog...Are share ownership guidelines reaching deeper into companies?...SEC considers revamping Reg S-K...Tax questions answered.

More tax questions answered...MyStockOptions has a nice Q&A for your participants,...California Franchise Tax Board provides guidance on state mobility taxation (free trial required)...Final substantial-risk-of-forfeiture rules are released.

Crystal ball...Dan Walter is predicting the next 10 years of compensation.

IFRS... SEC's new strategic plan backs away from IFRS.


Did you know SOS is hiring? Your dream job is here.

Free SOS Educational Webcast:

Excellence with Excel for Stock Plan Professionals

Please join us for our next educational webcast on March 20, 2014 at 11am Pacific Time, 2pm Eastern Time.


Most of us are forced to use spreadsheets to get parts of our jobs accomplished, no matter how great a stock plan system we have. Do you wish your spreadsheet processes were more efficient and less manual? Do you secretly think there must be ways to do things more efficiently in Excel? The good news is that there ARE tricks and tips that are out there that will help you save time (and your sanity) when working with Excel.

In this educational webcast you will learn from our Excel experts some common and even some less common features that you can use immediately in your day-to-day tasks. Join our panelists and learn how to get more by doing less with your spreadsheets.


(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.)


Have you SEEN the SOS Portal?
(It helped Synopsys win the Best Use of Technology Award from GEO this year!)

SOS Xposé

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

Career moves....  Heather Martin is now working as the Managing Director, Corporate Services at StockCross Financial Services. Laura Reis has taken a position at Square as a Stock Administrator. Miranda Garcia joined Zendesk as the Manager, Stock Administration. Karen Paganucci is the new Manager, Human Resources at Mondee, Inc. Mary Kelly is now working as Director- Business Development, Midwest for Solium. Colby Lish is a Stock Plan Administrator at eHealthInsurance. Mark Clem is at Vehlo Virtual LLC as the Founder and Managing Principal. Equity Administration Solutions, Inc. (EASi) has hired on some new folks recently that include Denise Scoville-Glackin, Brian Berry, and Usman Zafar for the role of Implementation Managers and Michael Murro as a Consultant Professional Services, congrats to all!

School daze...Fred Whittlesey of Compensation Venture Group  is also now an instructor and course developer for Financial Aspects of HR Management at the UCLA Extension-HR Certificate and guest lecturer in the Board Governance course of UC Irvine's MBA Program. How cool is this?

Sleepless nights... Daniel Alejo of SOS and his wife Frances welcomed their baby girl, Brooklyn, on January 22, 2014. She weighed 5 pounds and came in at 18 inches in length, see her pic here.

SOS is hiring and here are our recent additions:

Melissa Bannister (People Solutions)
Michael Forbes (Outsourcing)
Timothy Quist (People Solutions)
Katie Reid (People Solutions)
Lisa Sutter (People Solutions)
Sherry Tells (Strategic)
Stephen Tsio A Sue (Outsourcing)

In addition to the above employees, SOS hires, on average, approximately 30-35 seasonal employees to help us with our 6039 services.  This team aids us in producing and approximately 150,000 3921 & 3922 statements as well as year end participant statements for our clients.

Industry News...  Emily Van Hoorickx of UBS Financial Services' Silicon Valley Investment Group (SVIG) spoke at the Top Women Advisors Summit and was recognized as one of Barron's Top 100 Women Advisors for 2013. See who else from UBS was recognized here.

GEO's 2014 Northern California Forum is just around the corner. This year's event will be hosted at Auto Vino in Menlo Park on March 6th from 11:15am-6:00pm. Register now for this exciting half day event!


Wanna see where we are headed next? Check out our Industry Event page here.          

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.


Stock & Option Solutions | (888)SOS-0199
SOS Xtra Editor: Shawna Casey