The NASPP Blog

With Steve Jobs taking another medical leave, the internet is abuzz with the idea of succession planning. Even if it doesn’t make headlines, the unplanned exit of a stock plan manager can have drastic and long-term effects on an unprepared company.

Succession planning is a process that ensures a company is recruiting and grooming employees to fill key positions within the company. Shareholders may not be calling for a publicized succession plan for the stock plan manager any time soon, but it’s in both your and the company’s best interest that you do have one. Stock plan management should be considered a key position in the company. It is a hard-to-replace position that requires a unique skill set and is essential to daily operations. Every company should be prepared for a seamless transition for at least the key components of stock plan management.

The Fear Factor

A lot of employees, regardless of their position in the company, fear succession planning. Nobody wants to feel replaceable. However, being irreplaceable means that you can’t be promoted or take an extended leave (or maybe even a short vacation). It means that you haven’t demonstrated your skills as a people manager. Even if you are a team of one, creating a succession plan demonstrates that you have a managerial level grasp on the company’s needs. Also, you can’t expect to hang onto your job simply because nobody else can do it.

A Visible Advantage

Part of succession planning is transparency. The advantage to creating transparency is that people know what you do. It has to be very clear what you do in order for someone else to take over it in a pinch, but in the process of preparing for a transition you will be communicating your own value. When you start to coordinate with other members of your team or colleagues in other departments, sharing your efforts with management boosts everyone’s image. People can’t appreciate what they don’t understand. The stock plan administrator tends to be an underappreciated position simply because the people who are making budget decisions do not understand the importance and complexity of managing the company’s equity compensation program.

The Action Plan

Unless you are actually planning to leave your position in the near future, your succession plan doesn’t have to be elaborate. In fact, you have probably already started on some of the essential elements for a great plan just by documenting processes for your auditors. The first step is to identify the critical skills and experience necessary to fill your shoes. Next, detail the procedures you are responsible for that present the greatest risk for the company if they are either not done or done incorrectly (e.g., completing an ESPP purchase or RSU release, Section 16 reporting, or processing daily exercises). Outline which of these functions are immediate needs and which are periodic. Then, articulate the additional skills that you know you possess that make your day run smoothly. These are great to have for your next review, anyway, and will help your company identify the strength of potential candidates when the time comes. Finally, train someone else internally. Even if your company plans to bring in a consultant for emergency transitions, it’s important that there is at least one individual within your company who can instruct and monitor the consultant’s work (i.e., mind reading shouldn’t be a critical skill).

-Rachel