Buck Consultants’ 2013 Global Long-Term Incentives survey returned insight into some of the trends that capture the pulse of the global happenings in stock plans. In today’s blog, I’ll highlight some of the key observations.
It’s a Small World, After All
Oops, as soon as I wrote the above caption, the song from Disney’s “It’s a Small World” ride has been looping in my head. Sorry if it’s happening to you now, too (although misery does love company).
What I was reaching for is that some of the global trends point to a fairly consistent and uniform approach across the global board. Among them:
- Full value awards (time and performance based) are squarely the dominant form of equity compensation, with RSUs presently delivering the most value, globally.
- Stock options are out; their use globally continues to decline.
- The use of broad based equity globally is on the decline, and usage rates are projected to stay fairly flat in 2014. Senior management levels and above are most targeted to receive grants from the equity plan.
There weren’t any big surprises there – these trends have existed in the U.S. for a while now, but it is nice to have some confirmation that this truly is a global trend.
I was reminded when reviewing the summary of the survey of the key factors that drive global equity plan decisions:
- Overall objective: the company’s high level objectives filter down to many decisions, including how and when to use equity compensation.
- Local talent market: Sometimes it’s easy to forget that there are many other job markets and economies outside of the U.S. The dynamics of the local market can be a huge factor in determining a compensation approach. The survey summary cited the examples of China, India and the Philippines – all of whom have hot labor markets right now.
- Red tape: This has long been a consideration for U.S. parent companies looking to extend their compensation programs abroad. Just how many legal, securities, and employment considerations exist are largely specific to each country and therefore need to be considered in advance of adopting an equity approach in those regions.
- Taxes: The tax implications of certain award types are a big driver in determining what will maximize the value to the participant. Employer taxes are also a consideration.
- Administration: Last, but not least, the cost and burden to administer these programs abroad is considered. There are only so many resources available, and in some cases it may not make sense to issue equity once the administrative analysis comes into play.
One of my favorite NASPP resources is the bundle of Country Guides in our Global Stock Plans portal. The Guides provide a lay of the land on a myriad of considerations (including commentary from the practitioners who work on these guides) for 34 countries. If you are looking to expand into new regions, or offer additional equity types in existing countries, the Country Guides should be your first stop. There are a myriad of other resources available in the portal as well, all contributed by the folks and firms who specialize in global stock plans – a true gold mine of information.
-Jennifer
Tags: Global, global compliance, global stock plans portal, global trends
It’s happened to me twice recently: someone approaches me, bright eyed, with a great idea: “The NASPP should really put together some chapters or guides for international countries.” Did I say it’s a great idea? It is, the only catch being that the idea has already been implemented – in the form of (a whopping) 33 country-specific chapters that are collectively entrenched as one of the crown jewels of our Global Stock Plans portal. It occurred to me that some of our members may not even fully realize the multitude of resources available to them, all included with their NASPP membership. In today’s blog, I’ll revisit some the gems available to NASPP members (test your knowledge – are you in the know about all of them?)
7 Lucky Resources (ok, I made up the “lucky” part, but they are still fabulous!)
1. International Discussion Forum: Did you know that the topic of global stock plans has its own discussion forum? On top of that, questions posted to the forum are answered by experts in the field – members of our Global Task Force (a list of those members exists in the Global Portal).
2. Country Chapters: We currently have 33 country-specific guides in our Global Stock Plans portal, and more under development. The guides cover the basic legal, tax and exchange control landscape in the covered jurisdiction. This is a great place to start when venturing into a new country or offering new equity types in an existing one.
3. 42 Portals: In the world of NASPP, a portal is a portion of the site dedicated to a particular equity compensation area of focus. This means we have portals on 42 different administration and regulatory topics (and more under development). A portal contains anything from applicable regulatory and tax information, to articles, sample documents, tools, and other resources. The full list of portals can be accessed from the NASPP home page, the drop down menu on the NASPP home page, or here.
4. Global Alerts: Members of our Global Task Force (all of whom are experts in Global Stock Plans) sponsor the NASPP Global Portal by supplying country-specific alerts, global updates and articles. This means that when something significant happens in a particular country that impacts stock compensation, we’re likely to receive an alert. The alerts are posted to our Global Portal and alert subscribers receive an email notifying them of the update. You can subscribe to alerts by individual country, allowing you to receive alerts only for your areas of focus. We currently offer alerts for 68 countries. You can visit the Alert Archive at any time to see past alerts.
5. Monthly Webcasts: If you aren’t taking advantage of the free monthly webcasts, don’t delay. The subjects cover timely administration, regulatory and best practice topics (next month’s is: “Understanding Payroll Administration Related to Equity Compensation”. The speakers represent the best and brightest of the industry. Can’t make a particular webcast? Want to recall something from a past webcast? You can access the archive and dig up the details. This is a huge resource. Did Legal just approach you and ask you about grant practices? Go access the relevant webcast archive on the topic (March 2012) and you’ll have the expert opinions right at your fingertips!
6. Enhancers: There are several features of our web site that I refer to as “enhancers”. They are designed to enhance your knowledge or awareness of stock compensation practices and requirements. They include our weekly Question of the Week quizzes (all of January’s quizzes are active until the end of the month, so if you haven’t started the contest, jump in today!), our Compliance-O-Meter (this month’s topic is Employee Communication Practices), and our Practice and Regulatory Alerts(found in the dead center of our home page).
7. Career Center: I blogged about this feature last week, so I’ll keep it short (you can visit that blog for additional detail). The Career Center is a forum where employers can post equity compensation jobs, and job seekers can post their resume details. If you’re an employer with an opening, or an individual looking for a job in the industry, visiting the Career Center is a must.
These are just a few of the great resources available to you, all the time, as an NASPP member. Be sure you are maximizing your membership – we’re here to help you navigate equity compensation’s many facets! Not a member? Join or renew today.
-Jennifer
Tags: compliance-o-meter, global stock plans portal, NASPP member, portal, Question of the Week, resource, webcast