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!
The NASPP is proud to be an educational partner for the CEP’s East Coast Symposium, the newest one-day event in equity compensation. If you are located in the Northeast, this is a great opportunity to catch up on current developments in stock compensation, meet other equity professionals, and pick up a few continuing education credits.
Our own Jenn Namazi will participate in two panel discussions:
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The Symposium will be held on August 1 (with an opening reception on July 31) at The Heldrich in New Brunswick, NJ. The cost to attend is $350. Register today!
The NASPP is looking for members to help test the new NASPP website. You’ll have a chance to see the new website before anyone else, provide feedback, set up your profile and dashboard, and help the NASPP ensure a smooth launch for the website!
If you would like to help out with this project, please complete our short application. We expect to begin testing in a few weeks.
The NASPP is looking for members to help us review speaking proposal submissions for the 25th Annual NASPP Conference.
What’s Involved
You will be given 10-20 speaking proposals to review from March 13th to 24th. Each proposal will include a short description and a few other key details. You’ll read the proposal and rate it; we expect that it should only take 30 minutes or so for you to rate all the proposals assigned to you.
Your participation will help us design a program with topics and presentations that will draw attendees to our Conference, making the 25th Annual NASPP Conference the best one yet!
Qualifications
To participate in this program, you must meet the following requirements:
Be a current NASPP member
Work for an issuer company
Not be included as a panelist on any speaking proposals submitted for the Conference
Have attended the NASPP Conference at least once within the past three years
Willing to Help Out?
If you meet the qualifications and are willing to help out, please email Berni Toy at btoy@naspp.com.
The “Top Compensation Consultants: Survivor Edition” keynote at last year’s NASPP Conference was so successful that we have decided to continue to infotainment theme for this year’s keynote with “Family Feud: NASPP Style.”
Just like the real Family Feud, we’ll be conducting polls in advance (but on hot issues in stock and executive compensation, not on what you have in your refrigerator). Our “families” will consist of industry luminaries who will try to guess the poll results and will offer their commentary on the topics du jour. I think it will be a lot of fun, but will also be an interesting juxtaposition of popular vs. expert opinions on some of today’s most controversial topics.
Vote for the Speakers!
We have identified most of our family members, but we still have two open slots. For those slots, we have decided to give our community a chance to participate. Back in July, we collected nominations for “family members.” Eight industry luminaries were nominated—vote for your favorite today.
Here are the rules:
You can only vote for one candidate and you can only vote once.
You can campaign on behalf of your favorite candidate (or yourself, if you are a candidate).
No write-ins.
The poll is open until 5:00 PM Pacific on Monday, August 31.
The two candidates that receive the most votes will be included in the families.
This is the most controversial aspect of the exposure draft. The volatility that this change introduces to the P&L is likely to be significant for companies that rely heavily on stock compensation. We performed a very quick analysis of a handful of companies and found that, for several of them, recognizing excess tax benefits in their P&L would have increased EPS by 10%. In one case, EPS increased by 60%. Ultimately, we think this will be incredibly confusing to investors and other financial statement users. We also feel that it is highly unintuitive for changes in a company’s stock price to generate significant profits and losses for the company. While eliminating the ASC 718 APIC pool is very attractive, ultimately, we felt that the impact on earnings and effective tax rates would offset the benefits of simplifying this area of the standard. Because of this, we recommended against this amendment.
We suggested that companies record all excess tax benefits and shortfalls to paid-in capital, rather than tax expense. This would eliminate the need to track the APIC pool without impacting the P&L.
Forfeitures
We supported the proposal to allow companies to make a policy election to account for forfeitures as they occur. Our only comment on this topic was to suggest that the FASB provide a mechanism for companies to change their election without treating it as a change in accounting principle (which requires a preferability assessment and retrospective restatement).
Share Withholding
We supported the proposal to amend the standard to provide that shares can be withheld to cover taxes up to the maximum individual tax rate without triggering liability treatment.
We asked the FASB to provide additional guidance on how this requirement applies to mobile employees and suggested that share withholding be allowed up to the combined maximum tax rate in all jurisdictions that the transaction is subject to.
We also asked the FASB to remove the requirement that the tax withholding be mandated by law.
Practical Expedient to Expected Term
We supported allowing private companies to treat the midpoint of the vesting period and contractual term of an option as the option’s expected term for valuation purposes. We asked the FASB to remove the condition that the option be exercisable for only a short period of time after termination of employment and also requested removal of the conditions applicable to performance-based options.
The Rest of It and Thanks
We supported the remaining proposals in the exposure draft without comment.
Thanks to everyone that completed the NASPP’s quick survey on the exposure draft—I hope to have the results posted by the end of this week.
Thanks also to individuals who agreed to serve on our task force for this project: Terry Adamson of Aon Hewitt, Dee Crosby of the CEP Institute, Elizabeth Dodge of SOS, Sean Kelly of Morgan Stanley, Ken Stoler of PwC, Sean Waters of Fidelity, Thomas Welk of Cooley, and Jason Zellmer of Bank of America Merrill Lynch. Their help was invaluable.
The “Top Compensation Consultants: Survivor Edition” keynote at last year’s NASPP Conference was so successful that we have decided to continue to infotainment theme for this year’s keynote with “Family Feud: NASPP Style.”
Just like the real Family Feud, we’ll be conducting polls in advance (but on hot issues in stock and executive compensation, not on what you have in your refrigerator). Our “families” will consist of industry luminaries who will try to guess the poll results and will offer their commentary on the topics du jour. I think it will be a lot of fun, but will also be an interesting juxtaposition of popular vs. expert opinions on some of today’s most controversial topics.
Nominate a Speaker! We have identified most of our family members, but we still have two open slots. For those slots, we have decided to give our community a chance to participate. You can nominate yourself or someone else to be one of the “family” members.
Here’s how it will work:
Enter your nomination. You can nominate yourself or someone else that you think would be a good fit for the game.
The first ten nominees will be put on a ballot; I’ll announce the ballot in the NASPP Blog and our members will have two weeks to vote for their favorite nominee.
The top two vote-getters will be placed on the “families.”
(Note: To keep things interesting and diverse, each of the ten nominees on the ballot must be from different companies. If we receive nominations for multiple people from the same company, the first person nominated will be selected to be on the ballot. Also NASPP employees are ineligible to participate; we’ll already know the answers so it wouldn’t be fair to everyone else.)
Don’t Miss the 23rd Annual NASPP Conference
This year’s NASPP Conference will be held in San Diego from October 27-30. In addition to a super fun and informative keynote, we have close to 100 sessions on today’s hottest topics in executive and stock compensation. Check out the full program today—don’t wait; the early bird discount is only available until August 7.
For this week’s blog entry, I have pictures from the 11th Annual CEP and Silicon Valley NASPP Symposium and a short poll about what you think should be changed about stock compensation.
Tech writer and SCU adjunct professor Mike Malone presented the opening keynote. Mike ended with an 11-point program on things that it would be nice to change about stock compensation, including some controversial ideas. What do you think? I’ve included my (somewhat loose) interpretation of Mike’s ideas in a poll below; tell me which ones you’d like to see happen. Click here to participate if you can’t see the poll below.
Christine Zwerling of SOS, Josh McGinn of AST, and Connie Rawson of salesforce.com presented the much less controversial afternoon plenary on “How to Plan Nicely with Others.” One bit of advice from the panel: “Never underestimate the power of a well-timed donut.”
A couple of icons in the stock compensation world, Becky Broussard of Broussard & Associates and Susan Garvin of GoPro, catch up before attending an afternoon break-out session.
James Tozer and Zach Crumpton of E*TRADE chat with Debbie Tsoi-a-Sue of LendingClub in the E*TRADE booth.
More familiar faces! Paz Marie Dizon of Tesla, Lauren Downes of FitBit, and Marianne Friebel of Dolby, all long-time members of the NASPP and CEPs, network at the closing reception.
We recently issued a call to our members to give us feedback on your online experience, and boy did you answer! Thank you to all who participated in the survey. In today’s blog, I’ve got to get some important business out of the way – announcing the winners of the drawing for those who completed the survey. And, I’ll share some key findings from the survey – so keep reading!
And the Winners Are…
We drew 10 names from the group of survey participants that submitted their contact details. Each winner will receive a $50 Amazon.com gift card. Thank you again to all who participated. The winners are:
Eddie Pelatti, Fidelity Investments
Gilbert Szeto, Kranz & Associates
Helen Hauge, Seagate Technology
Kate Cordenner, AvalonBay Communities, Inc.
Patty Brown, Solium
Robert Veillette, Nordson Corp.
Sheila Matias, Red Hat
Vicky Quaranta, Verint Systems, Inc.
Wei Sun, SVB Financials
Charles Phillips, Tandem Diabetes Care, Inc.
A Peek at the Data
The results of the survey generally won’t be made public, because the intent of the survey was to gather information to help make your experience and interaction with the NASPP even better. We asked, you answered, and now it’s up to us to take what we’ve learned and apply the information to useful initiatives. That said, there were some data points we thought would be fun to share with our members. Here goes.
Preferred Portals
Many NASPP members know that a lot of the information and resources on our web site are categorized by topic and housed in what we call a “portal”. There are currently 46 portals on the NASPP.com website. Which were our members’ favorites? Here are the top 5 portals accessed most frequently:
Tax Withholding and Reporting
Restricted Stock
Global Stock Plans
Employee Communications, Employee Stock Purchase Plans, Executive Compensation, Administrative Tools (this was a 4-way tie)
Accounting/Stock Plan Expensing
There weren’t a lot of surprises there. I did notice an irony – in last week’s NASPP Blog (while the survey was still open), I wrote about our Global Stock Plans portal and the many resources available there. I had no idea at the time that it was going to be in the top 5 list for this blog, but it certainly reiterates that global issues remain high on the radar. If you want a refresh on the resources, check out last week’s blog.
You Want More Love
Well, this is Valentine’s week, so you know I had to find a way to incorporate the word “love” into the blog. What nearly half of survey participants actually said is that they want to engage even more with the NASPP (yay!). Zero (yes, 0%) respondents said that they want to engage “less” with the NASPP (double yay, you love us too!). So rest assured, we hear you loud and clear and are looking for even more opportunities for quality interaction. Some things I can think of immediately to raise your engagement:
Follow us on social media (links in the next section)
Join our Question of the Week Contest to keep your equity compensation knowledge on the cutting edge!
Let’s Be Social
One thing of note was that many of our survey respondents were willing to follow the NASPP on LinkedIn (more than 77%), but many expressed that they didn’t know the NASPP was even on LinkedIn. Let’s fix that right now! We do post a lot of content on LinkedIn – when we have new information on our website, or upcoming programs (such as webcasts and online education), we’re out there on LinkedIn talking about it. If there’s a new development, you can bet we’ll put something out via LinkedIn with information on a resource. We also have Facebook and Twitter pages, too. All 3 are great ways to get information real-time. It’s the quickest way available to us to disseminate information. So if you’re not following us, take a moment to do so! This will help with the “more love” request above. Click on the link(s) to get started: LinkedIn, Facebook, Twitter.
I want to again express thanks to everyone who participated in the survey. Your feedback has been very helpful. Even if you didn’t participate, you’ll still reap the benefits of whatever enhancements we’re able to offer.
Happy New Year! I figure I can get away with saying that for at least a bit longer. In between emerging from holiday celebrations and diving into year-end and tax reporting season, we always like to squeeze in some celebrating here at the NASPP. In what’s becoming my annual celebratory blog, I invite you to share in the congrats.
Question of the Week Winner!
Kudos to the winner and runners up of our Question of the Week contest. For those of you who are asking “What’s the Question of the Week Contest?“, it’s a weekly quiz challenge designed for stock plan professionals to test their know-how in a variety of areas, while competing against their peers. Hone your equity compensation knowledge while having fun at the same time! There’s a new question each week, and a correct answer earns points.
And the Winners Are…
A big congrats to screen name alias Flower power 121 for coming out on top of our 2014 contest. The screen names of the top 5 scorers are:
Flower power 121
mamaandmore
DMekwunye
Lucky13
CEP123
What’s in a Name?
In reviewing the scores from last year’s challenge, I couldn’t help but observe the originality of some of the screen names users are deploying in our contest. It seems nothing was off limits, from the range of “equity” and “stock” possibilities (Bob: Maximum Supreme Commander Equity Department, Got Equity?, cephopeful, StockNewbie, EquiDude) to the patriotic (Starspangled) to impersonators (Piglet, Tigger, Popeye, Truman and Jane Austen) to those who tell it like it is (Don’tKnowNuthin and IthinkUKnow). Of course our sports fans were abundant as well (HokieNation, bbcoachdan, RedsFan, Patriots Fan, NY_Yankee), in addition to a few that would probably require a happy hour and some time to explain (catfiend, Burger Monster, AwesomeSauce, Come on Gus!).
Work Hard, Play Hard
We’ve just reset scores and this week’s challenge starts a whole new contest, so this is the perfect time for NASPP members to sign up, create your screen alias and jump into the Question of the Week Contest. We leave all of January’s questions active for the entire month, so you have plenty of time to complete the first quizzes of the new game.
Equity Expert Podcast
One milestone we’re recognizing is the anniversary of our NASPP podcast series: Equity Expert. That’s right, you can download short episodes right to your computer, smartphone or other device and listen to them at your leisure. This series focuses on short interviews with some of the industry’s best and brightest on a variety of equity compensation topics. Shorter than webcasts, they are designed to give you the quick run down on details you need to know. We’ve posted 12 episodes so far, and hope to double that to 24 more in 2015! Be sure to subscribe in order to get updates on new episodes.
Social Status
Last year when I wrote this early January blog, we were celebrating our 400th LinkedIn follower. At the time of this blog, we’ve passed the 900 follower mark – more than double the number we had just a year ago! We’ve got lots of great content posted to our social media pages, so be sure to like/follow us on LinkedIn, Facebook and Twitter!
New Year’s Resolutions
Let’s face it – lots of us make them and many of us break them. I’m the first to admit I’m not the best at following through on keeping my New Year’s resolutions. One thing I’ve learned is that those who publicly declare their resolutions are more likely to keep them (peer pressure maybe?). In case you missed it, the NASPP has already captured the resolutions of some of our members – check them out and be sure to add your own in the comments! Our Executive Director, Barbara Baksa, hopes to include a cat video in every presentation she prepares this year (I’m looking forward to seeing that happen). I’ll publicly put two of mine out there – on the personal side I intend to walk a cumulative 500 miles this year in an effort to maintain my health. On the NASPP side, we are going to post at least 24 new podcast episodes to our series this year, so be sure to subscribe so you don’t miss out. And, in trying to motivate us all to stay true to our goals for 2015, I will post intermittent progress reports
I think that’s enough celebrating for now – time to get back to work (in my case, working on those 24 podcast episodes!). I wish all of you an incredible year.
