July 31, 2015
Volume 8, No. 4

In this issue:

Are You Ready To...RELEASE?

And The RSU Survey Says...

SOS Consultant Corner: How to Not Screw Up an RSU Release

SOS Online Demo

Across Our Desk

Free SOS Educational Webcast: RSU Release Prep-It's All About Your Checklist

SOS Xposé

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Request a call from an SOS Team Member to get answers to your questions and further discuss your needs-click here

From the SOS Library:

Accounting for Non-Employee RSUs

From the SOS Webcast Archive-

Ready, Set, Release: Streamlining and Simplifying Your RSU Release Process

Our Services: 


Professional Services


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Are You Ready To...RELEASE?

Does the thought of your next big RSU release give you the same anxiety as April 15th? With proper preparation, the day of your release can be much closer to a regular day of work.
Keep things simple
This is ideally done at the time of setting up the plan, but you can work closely with legal to determine the best tax method to use for withholding and paying the taxes due and we highly recommend that you stick to one method and not allow employees to choose how taxes are paid. Many companies choose share withholding to cover the taxes. If your company does not have ready cash available to cover the payment of employees' taxes to the IRS, consider mandating sell-to-cover method. Though you may need to work with your designated broker to make sure the employees involved are set up correctly, the point is to limit the possible choices and reduce the administrative work involved, and also to reduce employee confusion. Another best practice we've seen is to use sell-to-cover for non-US employees, for whom the "minimum statutory tax rate" is more challenging to determine and share withholding for the US population. (However, remember that the FASB is revising ASC 718 to eliminate liability accounting for over-withholding when shares are withheld.) The last thing you want to become is the debt collector chasing employees down to provide a check for the taxes due.

Make sure the tax man is "paid"eth
As the release date inches closer, work closely with payroll to ensure that each employee has the appropriate tax rates associated with their record in the stock database. Also, make sure you have the current year-to-date income numbers for the employees (ordinary income and supplemental), so your system can deal with the limits for taxes, such as the Social Security, Medicare, SDI, and Federal Supplemental $1 million. Lastly, do an estimate of the income generated from the release and provide the numbers to payroll to ensure the taxes are paid on time. They will appreciate your thoughtfulness, especially if they're up against the IRS $100k Next-Day Deposit rule!

Practice makes perfect
Once everything is current in the stock database, a few days before the release, you may want to do a practice release in a test database. This will provide you an idea of anything unexpected that may occur during the actual release, and allow you sufficient time work out the kinks. Maybe there was a termination since you ran the last report, or other changes that you hadn't considered in relation to the release. You can think more clearly and react more calmly when you aren't under the gun.
Take a deep breath, close your eyes, and exhale
You have done all the preparation and you are ready. Now just sit back and wait for the day to come to process the release. Just as a precaution, you may want to have another person available, in case you run into something unanticipated. Sometimes a fresh pair of eyes can see something you may have overlooked, especially if you have spent a long time looking at the same data.
Best of luck and happy release!
For more things to consider in anticipation of a large RSU release, you may want to review the webcast we presented last year: Ready, Set, Release!.


Apollo Mok, Equity Compenasation Consultant 
Stock & Option Solutions, Inc.

Apollo is an Equity Consultant for Stock & Option Solutions, Inc. (SOS) and has over 14 years of equity administration experience. As part of the People Solutions division for SOS, he travels throughout the country to provide client assistance ranging from data migration/implementation to onsite administrative assistance.

And The RSU Survey Says...

How do you comply with the IRS's next business day deposit requirements when your aggregate tax liability exceeds $100,000 in federal taxes owed for restricted stock and unit transactions?

For the 98% of the respondents who reach the $100,000 federal tax liability, recent IRS enforcement actions may have galvanized 52% of the respondents into action.   They reported that they accurately determined the withholdings due and make their deposit on time.  29% of respondents estimate the taxes and then true-up their calculations after the vesting event.  Alarmingly, 9% don't know if they are compliant and 8% are gambling that they won't get caught remitting their taxes late.  Hope the IRS misses this edition of Xtra!

How frequent are your RSU vest dates?

A full 50% of the respondents are processing RSU vestings based on individual employee vest schedules.  With employees constantly being hired, this could result in a vesting event every day.  Let's hope there are multiple staff members in those departments!  The one vest date per month is on the rise in popularity, with 15% reporting one vesting per month.  Vesting once a quarter came in at 35% (an SOS recommended "best practice").

Are RSU grants counted at a higher share depletion rate out of the plan than other grant types (for example, options)? (aka "Fungible Share Reserve").

Shareholder watchdog groups would be happy to know that the popularity of fungible share reserve plans is rising; 42% reported administering plans under which RSU grants counted at a higher rate than 1 to 1.  58% are either resisting pressure from those groups or haven't had a need to replenish their plans in some time and are counting all grants on a 1 for 1 basis.

Additional information in the SOS survey included questions regarding deferrals and tax payment methods.  For a full copy of the survey results, contact info@sos-team.com

Join the SOS Team

SOS Consultant Corner: How to Not Screw Up an RSU Release

I used to rent out a room to a guy named Tim. For inspiration, Tim cut out sports quotes and glued them all over his walls. The removal was brutal. I had to scrape and absorb Tim's credos for hours. Some stuck with me. This one will help you not screw up an RSU Release:
"Failing to prepare is preparing to fail."-John Wooden, legendary UCLA basketball coach
RSU Release Prep is all about the details, lots and lots of them. Tracking them is nerve-wracking. And the stakes are high. One misstep can damage your reputation. A tiny error can morph into a serious liability for your company. As a Release Date approaches, many stock plan administrators experience a dark foreboding and a deep sense of isolation, disorientation and helplessness. Some show signs of schizophrenia and hear voices.
"Has everyone accepted their grants? Do all my international participants have an updated W-8 on file? Are our tax codes up to date? Did I load the tax payment elections? Has everyone activated their broker accounts? Do I have any mobility to track? Has everyone accepted their Restricted Stock Terms and Conditions? And what about my Section 16 Officers? And when is my last payroll file update? I'm pretty sure we have some deferral elections. Did I load all my terminations? I think I did. Didn't Legal say we can't lapse in a blackout? Or we can but you just can't sell? And did I set the default tax payment method to share withholding? Does the broker do that? And for participants who elected to pay taxes with cash, who will remind them to deposit enough funds? Me or the broker? Do we need to give them tax estimates in advance? And what about the people paying with checks when am I sending out invoices? And I need to remember to pay the dividend equivalents. Except for Canada, they get shares. And our stock price is really volatile so I can't mess up the share deposits. And will all the trades for taxes tank our thinly traded stock like last time?"

A good checklist is better than prescription meds. Brain surgeons and airline pilots use checklists; laws mandate they do so, even for the most routine procedures. The risk of missing a step is too high. The same goes for RSU Releases; a well-structured RSU Release Prep Checklist will ensure that you never miss a step either.
SOS's upcoming Educational Webcast: RSU Release Prep - It's All About Your Checklist, will demonstrate how to use your equity plan software provider's Pre-Release Report as a companion piece to sample RSU Release Prep Checklists.
Don't be Sybil the Stock Plan Administrator. Register for the webcast today and quiet the voices in your head. 

Dan Shickler, Equity Compensation Consultant
Stock & Option Solutions, Inc.

Dan is an Equity Consultant for Stock & Option Solutions. With 20 years of experience in equity and Corporate Trust, he has worked with publicly-held companies, and on the vendor side, specializing in management consulting, creative solutions and writing personal bios in third person. He is also a stand-up comic.

SOS Online Demo

Now this you gotta see. Elizabeth Dodge takes us through sumifs with & in Excel

Across our Desk

ESPP... From Forbes, the employee perk with a guaranteed 15% return, featuring a quote from Fidelity's Emily Cervino.

From the NASPP Blog, the impact of marriage equality on stock plans, as well as their ISS scorecard update.

Recent survey data shows equity usage for incentives remains stable at most large U.S. companies... More large companies have stock ownership guidelines in place than ever before.

From Orrick, a plain English guide to the SEC's compensation clawback rules.

Congratulations to myStockOptions, which is celebrating its 15th anniversary. From their blog, a look back at major trends in equity compensation in the 21st century.

Free SOS Educational Webcast:

RSU Release Prep - It's All About Your Checklist

Please join us for our next educational webcast on
September 1, 2015 at 11am Pacific Time, 2pm Eastern Time.


There's a lot to consider. Grant Acceptance. Elections. Broker Accounts. Retirement Eligibility. Tax set-ups. Performance Goals. International. Terminations. Mobility. Deferrals. Etc. Etc. Etc. Etc. Release prep is like herding cats. Quiet the chaos. Step towards the light, and our panelists, and accept your Release Prep Checklists. You will experience a sense of order, inner peace and clarity that only the most organized Stock Plan Professionals can achieve.

This webcast will demonstrate how to use checklists along with your equity plan software's Pending Lapse reports to conquer the complexity and slow the moving parts.  And if your company is granting restricted stock units with acceleration or continued vesting available at retirement, this webcast will also show how essential a strong checklist can be in managing the expense, tax and 409A implications.


(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.)


Outsourcing. Find out why it's the best idea yet  

SOS Xtra needs your news! 

Know anyone in our equity comp industry who's taken a new job? Anyone expecting an addition to the family? Anyone moving, getting married, releasing a new product, rolling out a new program, etc.?

Please send over any ideas/thoughts you have to xtra@sos-team.com, we're happy to track down the person/company to confirm the news and get their acceptance to include it in Xtra. (All news is reviewed and approved by the person and/or company involved.)

SOS Xposé

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

Getting settled in...Aaron Boyd is now a Senior Compensation Consultant for Franklin Templeton Investments. Ruth Doyle is now working with Certent as a Financial Reporting Specialist. Kimberly Kovacs is a Partner and Emerging Growth Practice Leader for Hardesty, LLC and will be working at the main headquarters in Irvine, California. Kurt Grunsfeld is now an Executive Director at HighTower. Samantha Adams is now working for MuleSoft as a Sr. Corp Paralegal and Stock Administrator.
Too cute for words...Dan Walter and Melanie Jameson from Performensation are having a blast raising their son, Greyden. See Greyden in his SOS onesie in this candid pic!
On fire...Emily Van Hoorickx of UBS Financial Services, Inc. (San Jose) was named to Barron's 2015 Top 100 Women Financial Advisors for the sixth year in a row. Emily is a Certified Financial Planner, a CEP, and a long-term advocate for the equity compensation education. 

Roadrunners...Ryan Moore of SOS and his girlfriend, Justine Herrera, ran in their first half marathon in the Orange County Half Marathon on May 3rd, 2015.

Dog days...Some of our SOS mascots made a visit to the office. How cute are they?!

Blog Queen... Andrea Best, of SOS, writes for the NASPP Career Corner; her words of wisdom will make you all the wiser. Check out her latest blog posts.
Industry News...Equity Methods has been recognized in the 2015 Top Arizona Companies. Located in Scottsdale, Equity Methods keeps things fun for their employees with off-site retreats, happy hour events, and they even bring in a massage therapist to keep everyone relaxed!

SOS is hiring and here are our recent additions:
Christopher Bahue (Sales)
Chris Williams (People/Staffing Solutions)
Ryan Moore (Sales)
Chadwick Settles (People/Staffing Solutions)
Farah Mangoba (People/Staffing Solutions)
Lisa Sutter (People/Staffing Solutions)
Carlos Sarmiento (People/Staffing Solutions)
Vangie Alconis (People/Staffing Solutions)

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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