The NASPP Blog

It’s the last week of the year; a time when I usually post a lighter blog entry. For this year, in celebration of the NASPP’s 25th anniversary, I have a smattering of headlines from early issues of the NASPP Advisor (10 pts if you remember what the Advisor was called back then; 20 pts if you actually have a copy of one of the early issues.)

Best Practices for Filing Paper Grant Agreements

There were two camps, one for ordering by grant date and the other in favor of alphabetical by optionee. I remember suggesting during seminars that separate copies should be maintained by HR and by stock plan administration—all that paper! Another hot topic was whether stock options could be exercised by fax.

IRS Asserts that FICA/FUTA Applies to ESPPs

Ten points if you remember when this question was finally put to rest. (Hint: It was in the same bill that brought us 409A.)

New FASB Bill Introduced into Congress

In 1994, the Coalition for American Equity Expansion (CAEE) had just been formed to fight the FASB’s plans to require option expensing and was successful in getting a number of bills aimed at preventing the FASB from adopting its standard introduced into Congress. The Accounting Standards Reform Act would have required the SEC to approve all accounting standards, effectively stripping the FASB of its authority. An earlier bill created a new type of “performance stock option” that would have been eligible for fixed accounting and qualified tax treatment. A subsequent bill eventually passed and was instrumental in FAS 123 being relegated to a footnote in the financial statements.

T+3 Becomes Effective

Remember when settlement in three days seemed like an impossible task? Me neither. Seems like the move to T+2 this year was barely a blip.

How to Set Up a Cashless Exercise Program

Early issues of the Advisor had numerous articles on option exercise procedures that are now old hat and practices that have fallen by the wayside. In addition to tips on setting up cashless exercise programs, there were articles about using attestation for stock-for-stock exercises and case studies on how to manage tax withholding. Did you know that, in instances of withholding failures, the IRS use to assess penalties against individuals who were responsible for administering tax withholding for their employers? I’m glad they’ve dropped that program (technically, they can still assess these penalties but they generally only apply them in extreme cases and usually only against employers and business owners).

Here’s to the Next 25!

Thanks for indulging me in a little stock plan nostalgia. The NASPP has come a long way and it’s been a great first 25 years! Here’s to the next 25 years!

– Barbara