The NASPP Blog

April 17, 2014

The Acronym Challenge

I have a vivid memory of a moment that occurred during my first few weeks in the world of equity compensation. Freshly moved into the role of Stock Administrator, I was attending a meeting about the company’s upcoming IPO. I recall the General Counsel saying something like “…and we’ll need to figure out how we are going to keep track of the ISO QDs and DDs to make sure we properly report on the W-2 to the IRS.” That was a head scratching moment for me. Huh? What is an “ISO”? What is a “QD”? What is a “DD”? I think I’ve heard of the W-2 and the IRS.That moment was captured in my mind, because I left the meeting thinking to myself “with all these darn acronyms, I am never going to understand this stuff.” Fortunately, I did eventually get it figured out – but only after much confusion along the way. Of course, we’ve added so many new acronyms since that time. I often wonder how we can keep track of it all, and what new professionals in our industry must think about our heavy use of acronyms. In today’s blog I’m going to stick to the lighter side of things and offer up a quiz – for new and tenured stock compensation professionals. Can you pass the ECAC (Equity Compensation Acronym Challenge)?

The Rules of the Game

This is just for fun. There’s not even a prize. Yes, the answers are written in tiny print at the end of the blog. No, you can’t cheat.

All you need to do is answer the questions, check your answers, and have a bit of fun!

Here Goes…

Create your free online surveys with SurveyMonkey , the world’s leading questionnaire tool.

Check your answers below!

-Jennifer

Answers:

    1. ISO = Incentive Stock Option
    2. PSU = Performance Stock Unit
    3. MSU = Market Stock Unit
    4. DOMA = Defense of Marriage Act
    5. DRO = Domestic Relations Order
    6. EE = Employee
    7. TSR = Total Shareholder Return
    8. ESPP = Employee Stock Purchase Plan
    9. HSR Act = Hart-Scott-Rodino Act
    10. IFRS = International Financial Reporting Standards
    11. FICA = Federal Insurance Contributions Act
    12. SOX = Sarbanes-Oxley (as in the Sarbanes-Oxley Act of 2002 – and yes, there was a white house cat named “Socks” – different spelling!)
    13. SEC = Securities and Exchange Commission (for those who picked “Southeastern Conference”, remember – this is an equity compensation, not sports, quiz!)
    14. DRIP = Dividend Reinvestment Plan
    15. IRC = Internal Revenue Code
    16. MTM = Mark to Market