The NASPP Blog

Today’s blog features guest author Thierry Vo of UBS Equity Plan Advisory Services, writing about the factors that correlate to participants placing greater value on their equity awards.

Three Steps That Can Increase the Value Employees Place on Equity Awards

By Thierry Vo, UBS Equity Plan Advisory Services

How do employees view their equity awards? Would employees value these awards more if they had advice that helped them integrate equity compensation with their broader financial plans?  What tangible steps can employees take to recognize the value of equity awards?

These are just several of the questions UBS Participant Voice, an industry wide survey of equity plan participants, sought to answer using the UBS Equity Award Value Index, which measures the value employees place on their awards on a scale of 0-100. With companies granting more than $110 billion in equity to their employees each year*, understanding their participants’ attitudes toward these awards is critical.

The research found that while 32% of participants from a cross-section of industries and service providers see their awards as having high or considerable value (80-100 on the Index), 45% perceive little or no value in their equity (0-40 on the Index)—a concerning figure.

The UBS Participant Voice took the research one step further, conducting an industry-wide survey of more than 1,000 participants that sought to answer the question: What do employees who value their equity awards do differently?

Using the UBS Equity Award Value Index, UBS identified three key steps taken by employees who place high value on their equity awards:

• Planning—Those who incorporate equity compensation into an overall financial plan have a more optimistic outlook toward the importance of equity awards than those who do not.
• Advice—Those who discussed their equity with a financial advisor value their equity compensation holdings more than those who have not.
• Diversification—Participants who diversify their company stock holdings value their awards more than those who do not.

The real impact for participants comes from combining all three: planning, advice and diversification. The survey found that participants who have taken all three steps place twice as much value on their equity awards and have greater confidence about reaching their goals.

This survey shows that advice can prove instrumental in helping participants appreciate their equity awards.  It clearly highlights that participants who practice these three steps place higher value on their equity compensation awards.

For further detail about the survey’s results, read the full issue of UBS Participant Voice: The Multiplier Effect.

To learn more about how equity plan participants perceive more value from their awards, visit the UBS website or contact UBS by e-mailing EPAScommunications@ubs.com or calling 866-706-2727.

* Equilar, Inc. Based on 2,885 companies in the Russell 3000 that have fiscal year-ends of July 31, 2012, or more recent, and valued the grant-date fair value of options, stock appreciation rights, restricted stock and stock unit awards granted by companies during the most recent fiscal year. All information was pulled from the 10-K and was calculated using company-disclosed figures for grant-date fair value.

Thierry is the Head of Product for UBS Equity Plan Advisory Services (“EPAS”), leading the creation and execution of the product vision for UBS’ stock plan business that supports both corporate clients and their participants.

With over 15 years of experience in financial services—12 of them directly in equity compensation—Thierry possesses a keen understanding of the complex issues facing the industry’s key constituencies. He has extensive experience designing flexible solutions to meet the industry’s evolving needs. Through his roles at several major service providers, he has had the opportunity to collaborate directly with many leaders in the field. These experiences have allowed him to develop a unique perspective on how to address the diverse challenges confronting issuers and recipients of equity compensation.

Thierry has spoken nationally and internationally on a variety of industry topics. As an active member of both the National Association of Stock Plan Professionals (NASPP) and the Global Equity Organization (GEO), where he has also served as a Board member, Thierry has consistently kept his finger on the pulse of the industry to prepare for what’s next.