Our popular “Meet the Speaker” series, featuring interviews with speakers at the 24th Annual NASPP Conference, is great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.
NASPP: What is the most critical thing NASPP Conference attendees need to know about Rule 10b5-1 plans?
Christine: When looking at 10b5-1 plans, the role of the company and the board is increasing. This includes the adoption of specific 10b5-1 policies. Our survey found that 98% of companies are involved in reviewing and approving their 10b5-1 plans to some degree. Additionally, 67% of boards approved their companies insider trading policies, which often includes restrictions on the terms of the 10b5-1 plans.
NASPP:What is a common mistake companies make when it comes to Rule 10b5-1 plans and how can they avoid this?
Christine: A common mistake for a company is not developing an organized process, in particular not consolidating their insiders’ 10b5-1 plans. A brokerage firm can help a company achieve its objectives, manage its population, and simplify its process. Also it can help to retain one brokerage firm who has the capability of centralizing the transactions for all of a company’s insiders on one plan management platform.
NASPP:What is the silver lining to your session?
Christine: This survey gives us up-to-date benchmarking where we didn’t have benchmarking before.
NASPP:What is something people don’t know about you?
Christine: I’m not only from a large family of six boys and three girls, but one of my six brothers is also my twin!
The 24th Annual NASPP Conference will be held from October 24-27 in Houston. This year’s program features close to 100 sessions on today’s most timely topics in stock and executive compensation; check out the full agenda and register today!
Our popular “Meet the Speaker” series, featuring interviews with speakers at the 24th Annual NASPP Conference, is great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.
NASPP: Why is the topic of director compensation particularly timely right now?
Doreen: Although director compensation rarely receives the same attention paid to executive compensation, recent high profile decisions in the Delaware courts have placed it in the spotlight. Companies that fail to adhere to the procedures for shareholder ratification of director compensation provided for in these decisions may find their directors in the crosshairs of a plaintiffs’ attorney claiming breach of fiduciary duty.
NASPP:What is a common mistake companies make with awards to directors and how can they avoid this?
Doreen: Many companies provide for an annual limit on director compensation grants in their equity compensation plans. Previously, these companies were able to take the position that approval of the equity compensation plan also equated to shareholder ratification of the director equity grants. In many of these plans, however, the annual limit is not meaningful or specific and, therefore, the Delaware Courts have held that no shareholder ratification has taken place. Companies can avoid this problem by amending their plans to include meaningful limits if they think the risk of litigation is high.
NASPP:What is the silver lining?
Doreen: Although plaintiffs’ lawyers now view director compensation as a new avenue to extract payments from companies, these lawsuits can be easily avoided through proper planning. Including meaningful limits on director compensation awards in equity compensation plans that are put to a shareholder vote will ensure that directors continue to be protected by the business judgment rule.
NASPP:What is something people don’t know about you?
Doreen: I’m renovating a landmarked Harlem brownstone built at the turn of the last century from the ground up while living in it!
The 24th Annual NASPP Conference will be held from October 24-27 in Houston. This year’s program features close to 100 sessions on today’s most timely topics in stock and executive compensation; check out the full agenda and register today!
Our popular “Meet the Speaker” series, featuring interviews with speakers at the 24th Annual NASPP Conference, is great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.
NASPP: Why is now a good time to talk about hiring and recruitment?
Andrea: In a tight hiring market, such as we are seeing today, recruiting top notch, highly skilled equity compensation professionals can be a much more challenging endeavor than expected. Only adding to that challenge is the fact that making the wrong hire can cost you. The Department of Labor estimates the average cost of a bad hire at about 30% of the employee’s first-year salary. In our industry, that can add up to some serious dollars. That is why successful hiring managers employ innovative tools and strategies to both identify the right fit for their organizations and remain competitive. Of course, robust compensation and benefits packages give you a leg up once you get to the negotiation phase; however, there are many things that managers can do, from the point of assessing their needs and writing up a job description all the way through to making an offer and on-boarding their new hires, that increase their odds of being successful.
NASPP:What is a common mistake companies make when hiring new employees and how can they avoid this?
Andrea: Making the right hire is about much more than just identifying the candidate with the hard skills, or specific experience and expertise, required for success in the job. Given the importance of specialized skills in our industry, a common mistake companies make is selecting a hire based solely on technical skills. However, managers who take the time to assess cultural fit, professional philosophy, and interpersonal skills, such as flexibility, communication, and teamwork, have a much greater chance of hiring and retaining the best fit for their teams. Therefore, thorough preparation for recruiting a new employee ought to include assessing your company and departmental culture as well as defining your management style and the soft skills critical for effective integration into you team.
NASPP:What are some keys to hiring the right people?
Andrea: Though the hiring process is fraught with challenges and risks, managers can avoid the inherent pitfalls by preparing well and educating themselves on the most efficacious approaches for zeroing in on the best candidate for the role. Some keys to making the right hire are:
Proper preparation,
Inclusion of key stakeholders and team members,
Leveraging your network,
In-depth interviews,
Cultural fit assessments, and
Providing feedback to candidates throughout the process.
NASPP:What is something people don’t know about you?
Andrea: Many are not aware that I studied and write poetry. I am currently working on a collection of poems inspired by the universe at the micro and macroscopic levels. I am especially fascinated by cosmic and quantum phenomena as they relate to the beauty and heartache of human relationships.
The 24th Annual NASPP Conference will be held from October 24-27 in Houston. This year’s program features close to 100 sessions on today’s most timely topics in stock and executive compensation; check out the full agenda and register today!
Our popular “Meet the Speaker” series, featuring interviews with speakers at the 24th Annual NASPP Conference, is great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.
NASPP: Why is your session, which is a perennial favorite among Conference attendees, always relevant and timely?
Valerie: As we have seen in recent weeks with Brexit, the geo-political and economic landscape is constantly changing and to stay on top of international equity compliance is challenging. Baker & McKenzie and E&Y do our best to address the latest changes effecting global equity during our session on international updates. That said, we never know until the day we present what exactly we are going to cover, so in recent years, we have prepared slides that we end up skipping over, editing or moving to an appendix because they are out of date on the day of the session. For this reason, it’s important to come to the session; you never know what might be new!
NASPP:What is one best practice companies should implement to keep their global stock plans in compliance with local laws?
Valerie: I recommend that companies have a regular process for staying on top of changes to the global tax and compliance rules. Tax rules need to be checked at least once per year as rates and requirements change annually. Companies should be aware that not all countries have a calendar year as their tax year, so knowing when the tax year is for the country and making sure that the company checks any changes to the tax requirements taking effect in the tax year is a good idea. With regard to regulatory issues, I have quarterly calls with clients to go over the new developments effecting their equity offerings and to strategize as to whether the company needs to do something to comply with a new rule now or can wait until the next focal grant or ESPP offering. Another tip here is to think about whether updates need to go to the board/compensation committee and if so, to time any updates accordingly.
NASPP:What is the silver lining to managing compliance for global stock plans?
Valerie: It’s never boring.
NASPP:What is your favorite restaurant in Houston?
Valerie: If you like pork, then I would try Underbelly Restaurant. A couple of my colleagues from our Houston office took me to dinner there and we had a great meal.
The 24th Annual NASPP Conference will be held from October 24-27 in Houston. This year’s program features close to 100 sessions on today’s most timely topics in stock and executive compensation; check out the full agenda and register today!
Our popular “Meet the Speaker” series, featuring interviews with speakers at the 24th Annual NASPP Conference, is great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.
NASPP: Why is governance of global stock plans a particularly timely topic right now?
Aimee: Companies are facing increased scrutiny with respect to corporate governance and compensation practices. Coupled with constantly evolving laws in the U.S. and abroad, this makes for an increasingly complex environment when granting equity around the world.
NASPP:What is a common mistake companies make with their stock plan governance and how can they avoid this?
Aimee: A common mistake I see companies make is being overly zealous with delegations of authority (e.g., delegating authority to make grants under a plan, amend grants, adopt a sub-plan or take other administrative actions). Without an effective delegation of authority, a company could find itself having to unwind unauthorized actions—resulting in a whole host of legal, tax and accounting issues. To avoid this, a company should regularly review and refresh on applicable state law requirements in its state of incorporation, its compensation committee charter, SEC rules and plan terms. (You’ll be surprised how many decisions are supposed to be made by the board of directors or compensation committee!)
NASPP:What is the silver lining here?
Aimee: Armed with our 10 Golden Rules, companies will be well on their way to good stock plan governance, mitigating risk to the company (and hopefully resulting in a better night’s sleep).
NASPP:What is something people don’t know about you?
Aimee: I’m originally from Albuquerque, New Mexico and Hatch green chile (which is difficult to find outside of New Mexico) is one of my favorite foods.
The 24th Annual NASPP Conference will be held from October 24-27 in Houston. This year’s program features close to 100 sessions on today’s most timely topics in stock and executive compensation; check out the full agenda and register today!
Our popular “Meet the Speaker” series, featuring interviews with speakers at the 24th Annual NASPP Conference, is great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.
For today’s “Meet the Speaker” interview, we feature Aaron Oberg of E*TRADE Financial Corporate Services, who will lead the session “Globe Trotting, Equity Compensation Style!”
Here is what Aaron had to say:
NASPP: What is the most critical thing NASPP Conference attendees need to know about administering global stock plans?
Aaron: Administration of a global stock plan can seem overwhelming. There is no doubt that complexity with offering equity in multiple jurisdictions grows exponentially with the number of locations that are added. The constantly changing arena is also hard to keep up with. Our session is designed to break it down into manageable chunks that focus on what you need know and do, as well as how you can do it with tools, partners and processes accessible to you today. We will discuss the complexities, but our goal is to give you practical knowledge on how to apply workable strategies that you can start with today.
NASPP:What is a common mistake companies make when administering their global plan and how can they avoid this?
Aaron: A common mistake we see is inaction or inadequate action caused by fragmentation within a company. This mistake is also one of the easier ones to solve through building a more cohesive cross-functional team. Many times we see that there is not one single group or person that has the entire picture in view. This causes either the lack of implementing any process, or implementing a solution piecemeal that does not provide an optimized process. The most successful engagements we have seen include a combination of collaboration, accountability, and access to tools and resources required for an efficient and controlled operation.
NASPP:What is the silver lining to your topic?
Aaron: The global landscape is not all doom and gloom, but it can be intimidating. The silver lining to our topic is arguably that equity compensation is becoming more complex and prevalent. While this creates new challenges for stock plan professionals every day, it also makes it more and more visible beyond the industry. This attention to it is making it easier to get the help and backing needed to tackle it all. This can be managed, and we see companies do it all the time.
NASPP:What is something people don’t know about you?
Aaron: Most people don’t know that I originally worked at ski resorts to get through aviation school. However, after I saw the exciting world of equity compensation, I quickly left all that behind for a more fun career in stock plan administration.
The 24th Annual NASPP Conference will be held from October 24-27 in Houston. This year’s program features close to 100 sessions on today’s most timely topics in stock and executive compensation; check out the full agenda and register today!
Our popular “Meet the Speaker” series, featuring interviews with speakers at the 24th Annual NASPP Conference, is great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.
NASPP: What is the most critical thing NASPP Conference attendees need to know about your topic?
Alan: Corporate events, such as a merger with or acquisition of another company, occur frequently. Whether a company is on the buy or sell side, there are a number of issues affecting equity compensation plans that must be addressed. Most of these issues require decisions and actions that must be made prior to the occurrence of the transaction. Similar events, such as a spin-off or intial public offering, also impact equity compensation and require timely action.
NASPP:What is one best practice companies should implement?
Alan: Corporate folks who work with equity compensation should be brought into the loop as soon as possible. The legal and finance teams are usually the lead people and thus are involved from the beginning. Executive compensation and equity plans often play a big role in many transactions because of the public attention they draw as well as the financial impact on shareholders and the metrics of the deal. For these reasons, it is important to get HR and the equity compensation director on board sooner rather than later.
NASPP:What is the silver lining to your topic?
Alan: Our presentation covers a broad array of equity pay issues that arise during a corporate event and that require appropriate planning and action. Oftentimes, not all of these issues are properly addressed in a timely fashion, which may result in unhappy employees, unanticipated costs, legal liability and even lawsuits. Our session will help participants identify the issues they should thinking about in various situations. Our focus will be more about the actions they should taking rather than a detailed analysis of the technical issues.
NASPP:What is something people don’t know about you?
Alan: I grew up in Cleveland and attended John Carroll University, a Jesuit college. That might seem strange because we were Orthodox Jews, but the Jesuits provide a great education and the school was only a few blocks from my home. I am probably the only guy who worked his way through a Jesuit college giving Bar Mitzvah lessons.
The 24th Annual NASPP Conference will be held from October 24-27 in Houston. This year’s program features close to 100 sessions on today’s most timely topics in stock and executive compensation; check out the full agenda and register today!
Our popular “Meet the Speaker” series, featuring interviews with speakers at the 24th Annual NASPP Conference, is great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.
NASPP: What is the most critical thing NASPP Conference attendees need to know about your topic?
Renee: Life events create administrative challenges for your stock plans and can significantly impact your employees emotionally and financially. Yet some of the toughest events we cover in our session are sensitive topics for some—and, therefore, rarely discussed. “Mind your Ds & Ts” addresses the difficult questions, including administrative and legal considerations with a diverse panel that brings multiple perspectives to the discussion.
NASPP:What is one best practice companies should implement?
Renee: Start talking and don’t shy away from these important topics. Review all your stock plans for how life events (death, disability, retirement, divorce) are handled and proactively communicate this to employees. Encourage them to think about equity in terms of life events and to plan for them.
NASPP:What is the silver lining to your topic?
Renee: Companies are better prepared to deal with life-changing, sometimes traumatic events for employees as it pertains to their equity programs. By thinking beyond the plan mechanics and using equity as a spring board to overall financial wellness, companies also are helping their employees be better prepared to navigate life’s unexpected turns.
NASPP:What is something people don’t know about you?
Renee: I like to play in the dirt—in my perennial gardens.
The 24th Annual NASPP Conference will be held from October 24-27 in Houston. This year’s program features close to 100 sessions on today’s most timely topics in stock and executive compensation; check out the full agenda and register today!
* Schwab Stock Plan Services provides equity compensation plan services and other financial services to corporations and employees through Charles Schwab & Co., Inc. (“Schwab”). Schwab, a registered broker-dealer, offers brokerage and custody services to its customers. Member SIPC. 0716-2730.
Our popular “Meet the Speaker” series, featuring interviews with speakers at the 24th Annual NASPP Conference, is great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.
NASPP: Why is your topic particularly timely right now?
Raul: Our session will discuss how ASU 2016-09 changes EPS, from the exclusion of excess income tax benefits in the assumed proceeds calculations in the Treasury Stock Method method (ASC 260), to the changes in tax expense and in net income due to the elimination of the APIC pool, the net effect of the changes in accounting for forfeitures, and the possible effect of changes to the minimum share withholding requirements.
NASPP:What is one best practice companies should implement?
Raul: A checklist of items that are part of the EPS calculation, such as activity from stock options, RSUs, ESPP, performance shares, buybacks, and roll-forward of outstanding shares.
NASPP:What is the silver lining to your topic?
Raul: EPS is a key calculation and gets a lot of visibility in the company, particularly from senior finance and accounting management and external auditors.
NASPP:What is something people don’t know about you?
The 24th Annual NASPP Conference will be held from October 24-27 in Houston. This year’s program features close to 100 sessions on today’s most timely topics in stock and executive compensation; check out the full agenda and register today!
Our popular “Meet the Speaker” series, featuring interviews with speakers at the 24th Annual NASPP Conference is great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.
NASPP: Why is Section 16 compliance particularly timely right now?
Alan: Section 16 compliance is a particularly timely topic right now for two reasons. First, the SEC has stepped up its Section 16(a) enforcement program, targeting more late filers of Forms 4 and increasing it monitoring of noncompliance through electronic surveillance techniques. Second, the Section 16(b) plaintiffs bar is growing in size and becoming increasingly aggressive in pursuit of potential recoveries of short-swing profits. These developments make it even more important than before that every public company have a qualified, knowledgeable person responsible for Section 16 compliance.
NASPP:What is one action should companies be taking now with respect to Section 16?
Alan: Companies should review their existing compliance program, including how they determine each insider’s beneficial ownership, how and from whom they receive information about insiders’ holdings and transactions, and how they keep insiders’ informed of the importance of restricting and monitoring the actions of their financial advisors, to be sure that the compliance program is designed and implemented to maximize filing compliance and minimize exposure to liability under Section 16(b) as well as the SEC’s antifraud rules.
NASPP:What is the worst Section 16 horror story you know?
Alan: A Section 16 insider paid more than $30 million in short-swing profits, as calculated under the punitive “Smolowe rule” of matching the highest priced sale with the lowest priced purchase within six months, because the compliance staff didn’t fully understand the application of Section 16 to transactions in derivative securities.
NASPP:What is your favorite memory from a past NASPP Conference?
Alan: My favorite memory is of the first few NASPP Conferences, which seemed to be held in San Francisco in those days, and finding time to explore the city and even Napa Valley with other speakers. Running into Conference speakers and attendees around town made the city and the Conference very personal.
The 24th Annual NASPP Conference will be held from October 24-27 in Houston. This year’s program features close to 100 sessions on today’s most timely topics in stock and executive compensation; check out the full agenda and register today!