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!
We are pleased to bring back our popular “Meet the Speaker” series, featuring interviews with speakers at the 24th Annual NASPP Conference. These interviews are a 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 our first “Meet the Speaker” interview, we feature Deborah Walker of Cherry Bekaert, who will lead the session “The IRS and Treasury Speak.” Here is what Deborah had to say:
NASPP: Why is your topic particularly timely right now?
Deborah: Our presentation features IRS and Treasury speakers involved in regulatory and legislative initiatives involving equity compensation. This is a chance to hear the government’s enforcement focus and new guidance that could affect your equity plans and programs. In prior years, the session has been interactive, giving you a chance to question the government officials about an issue that concerns you and discuss their response, often giving the government ideas for ways to approach various issues that are less obtrusive than what the government may think about. We look forward to another interactive session this year in Houston.
NASPP:What is one best practice companies should implement?
Deborah: The IRS is implementing new computer audit procedures, enabling them to determine that withholding taxes are unpaid in a matter of days rather than in a matter of months. To avoid unnecessary intrusions in the form of “soft letters” from the IRS, you should review your payroll tax withholding and deposits for equity compensation, focusing particularly on the timeliness of deposits for the vesting of restricted stock and the exercise of non-qualified stock options. This should be done on a regular basis. Correction of failure to deposit amounts should be done as soon as possible.
NASPP:What is something companies should know about penalty assessments from the IRS?
Deborah: As the IRS computer systems are becoming more modern, there is an increase in penalty assessments. If you are assessed an IRS penalty, the IRS has a program allowing for the waiver of penalties when a penalty notice is a first time assessment. The program is only available to those who have had no penalties in the prior three years. There is no limit on the amount that can be waived. If this program is not available to someone when a penalty has been assessed, the taxpayer or their representative should always ask for waiver of the penalty for reasonable cause.
NASPP:What is something people don’t know about you?
Deborah: I had a speaking part as a terrified nun in the Three Stooges movie produced in 2012 by 20th Century Fox and directed by the Farrelly brothers.
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 22nd Annual NASPP Conference, is a great way to get to know our many distinguished speakers and find out a little more about their sessions in advance of the Conference.
Wendy: We will discuss issues that stock administrators may not think about in their day-to-day administration but that can creep up on you if you don’t watch out. We want to help prevent the “gotchas” that stock administrators either don’t have to think about every day or new issues that they might not have ever had to think about.
NASPP: What are some best practices companies should implement?
Wendy: I think one of the most important practices is to plan well in advance of equity events. Knowing the issues ahead of time will ensure smooth administration of events and prevent errors or issues related to non-compliance. For example we will discuss best practices around the administration of performance-based awards, maintaining an insider list and making sure your data privacy consents are in order.
NASPP: What is the silver lining in your session?
Wendy: Attendees can learn about the issues and problems we have experienced and avoid the “gotchas” altogether.
NASPP: Tell us three things people don’t know about you.
Wendy: I have a twin brother, I have a special-needs son, and I have taken up tennis in the last year thanks to the inspiration from my special-needs son who is learning tennis through the Special Olympics.
About the NASPP Conference
The 22nd Annual NASPP Conference will be held from September 29-October 2 in Las Vegas. This year’s program features 60+ sessions on today’s most timely topics in stock compensation; check out the full agenda and register today!
Our popular “Meet the Speaker” series, featuring interviews with speakers at the 22nd Annual NASPP Conference, is a 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 a common misperception about financial reporting?
Kathy: I think companies underestimate the impact of plan design on accounting, reporting and administration. Often problems arise once the program is in place and can have unexpected costs. Taking the time to coordinate all aspects in advance saves time and money.
NASPP: What common mistake do companies make and how can they avoid it?
Kathy: The biggest mistake companies can make is to not think about all aspects of equity in advance. Consider the regulatory aspects, accounting impact, system capabilities and administrative burden before you implement. Then you will see the benefits of your equity for your participants.
NASPP: What is the silver lining?
Kathy: The things we recommend have no additional cost to implement. And they will help build a cohesive team atmosphere during plan design and implementation. Lastly they will help prevent unexpected hazards along the way.
NASPP: Tell us three things people don’t know about you.
Kathy:
I live in a very rural area of central Pennsylvania with my children and grandchildren.
I like to paint, needlework and read for relaxation.
I really like what I do—I’ve always had service type jobs and enjoy helping people.
The 22nd Annual NASPP Conference will be held from September 29-October 2 in Las Vegas. This year’s program features 60+ sessions on today’s most timely topics in stock compensation; check out the full agenda and register today!
Our popular “Meet the Speaker” series, featuring interviews with speakers at the 22nd Annual NASPP Conference, is a 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 internal controls?
Keyoor: Having controls and procedures in place will make your job easier and will protect you. It will minimize public scrutiny.
NASPP: What common mistake do companies make and how can they avoid it?
Keyoor: Not having proper procedures and controls in place, especially in a sole administrator environment. Even if controls are in place, sometimes the checkpoints to ensure they are properly followed are not in place. Many times, a sole administrator relies on memory or skips cross-check and re-check procedures. First and foremost, good and practical controls and procedures need to be in place. Especially when in comes to financial and SEC reporting.
NASPP: What do you hope to accomplish with your session?
Keyoor: We hope to provide attendees with methodical guidelines for developing good controls and procedures. The presentation will focus on financial reporting and SEC reporting.
NASPP: Tell us three things people don’t know about you.
Keyoor:
I am a foodie. I eat pretty much anything.
I have traveled to 46 states and plan of traveling to the remaining four this summer.
I have a masters degree in corporate law and finance (LLM).
About the NASPP Conference
The 22nd Annual NASPP Conference will be held from September 29-October 2 in Las Vegas. This year’s program features 60+ sessions on today’s most timely topics in stock compensation; check out the full agenda and register today!
We’ve been running Meet the Speaker interviews in the NASPP blog lately to let our readers get to know the speakers at the 22nd NASPP Annual Conference and provide a sneak peak at their presentations.
Since this is a holiday week, I thought it would be a good time to take a break from our usual interviews and interview myself. There’s only one problem: I’m not speaking on any sessions this year (I guess I didn’t like any of my proposals–it’s very tough to be selected as a speaker), so the only topics I can interview myself on are the opening remarks and the award presentation.
NASPP: We’ve heard that if people listen close during your opening remarks, they can hear your knees knocking together. Is this true?
Me: Yes, it’s certainly possible! It’s a big room; presenting to closely to 2,000 people is unnerving. On top of that, I’m much more comfortable presenting technical information (if I could open the Conference with a brief overview of the Treasury Stock Method, I would be much happier). It’s the only time I ever completely write out my remarks—word-for-word—in advance.
NASPP: What are some tips you can offer to help people get the most out of the Conference?
Me: Take advantage of the Stock Plan Experts that will be available to answer questions! We have a list of close to 50 industry experts that have agreed to make themselves available to answer questions for attendees. These experts will be available during breaks in our Ask the Experts Booth and in their exhibit booths. They include lawyers, compensation consultants, accountants, and administrative experts–whatever your question, there’s someone who can answer it. It’s a great opportunity to get some free guidance on the challenges you are facing.
And join one of the luncheon roundtable discussions! We also will be featuring roundtable discussions during lunch on Tuesday, September 30. The topics will be listed in the Conference Guidebook and online. You can participate in a discussion with like-minded attendees, share tips and experiences, and build your network all at the same time.
NASPP: Is it worth it to get up early for the opening keynote on September 30?
Me: Yes, absolutely. My understanding is that Broc Romanek is going to moderate the panel as his alter persona–Cap’n Cashbags. It’s worth it just for that. It’s also going to be a keynote like you’ve never experienced before. It’s a twist on one of our most popular sessions: the “Top Compensation Consultants Speak” panel. But this time, the audience will be able to vote a consultant of the panel after each question. If you’ve ever been listening to a panel and thought “Man, I’d really like to kick that guy off this panel,” now’s your chance!
NASPP: We’ve heard a rumor that the location of next year’s Conference will be revealed after the Award Presentation on Wednesday, Oct 1. Is this true and can you give us a hint?
Me: Yes, it is true! I’m excited to report that we just last week signed the contract for next year’s Conference, so we will be announcing the dates and location at this year’s Conference. I can tell you that we’ve been to this city before but it’s been a few years since we were last there. And I think people are going to be very excited about it; it’s certainly one of my favorite places to attend a Conference.
NASPP: Don’t you say that about all the Conference locations?
Me: Ok, yes, that’s probably true. They’re all my favorites.
About the NASPP Conference The 22nd Annual NASPP Conference will be held from September 29-October 2 in Las Vegas. This year’s program features 60+ sessions on today’s most timely topics in stock compensation; check out the full agenda and register today!
Our popular “Meet the Speaker” series, featuring interviews with speakers at the 22nd Annual NASPP Conference, is a 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 an interview with Christine Zwerling, CEP of Stock & Option Solutions, Inc., who will lead the session “Extreme Makeover: ESPP Edition.” Here is what Christine had to say:
NASPP: What is a common misperception about ESPPs?
Christine: Many companies believe that ESPP participants sell their shares within days or weeks of the purchase date. Fidelity has provided statistics from a recent survey proving this misconception is wrong. We have lots of survey data on perceptions of ESPPs and program trends to share.
NASPP: What actions should companies be taking now with their equity programs?
Christine: Companies should be evaluating the ROI on their equity plans; many will find that an ESPP provides ROI with engagement and cost savings over other traditional programs. ESPP programs are a cost-effective way to encourage company ownership at all ranks through a program where employees actively decide to purchase shares (as opposed to being given shares), providing employees with a sense of empowerment and engagement.
NASPP: What is the silver lining to ESPPs?
Christine: ESPPs virtually pay for themselves. Remember, participants are paying for the shares—so these programs bring in money. If an employee does sell the shares early, the company receives a tax deduction; plus, ISS voting guidelines generally automatically recommend voting FOR IRC§ 423-compliant plans.
NASPP: Tell us three things people don’t know about you.
Christine:
I hate pickles and anything pickled (why do delis insist on pressing a pickle right up against a perfectly good sandwich!?);
I attended 12 different schools; and
Both of my sons joined our family through domestic open adoption.
About the NASPP Conference
The 22nd Annual NASPP Conference will be held from September 29-October 2 in Las Vegas. This year’s program features 60+ sessions on today’s most timely topics in stock compensation; check out the full agenda and register today!
Our popular “Meet the Speaker” series, featuring interviews with speakers at the 22nd Annual NASPP Conference, is a 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 an interview with June Anne Burke of Baker & McKenzie, who will lead the session “Top 10 Most Expensive Mistakes with ESPPs.” Here is what June Anne had to say:
NASPP: Why are ESPPs a particularly timely topic right now?
June Anne: After a decline in popularity of ESPPs following the change in accounting treatment under US GAAP circa 2004, ESPPs are making a comeback. Many companies that have reduced the size of the population eligible for equity incentive awards (such as stock options and restricted stock units) over the last several years sense that something is missing: namely, the opportunity to purchase company stock at a discount, employee focus on company financial success and/or identification with the parent company. Further, with companies continuing to expand internationally, we are increasingly seeing companies implementing ESPPs on a global basis. We now have had several years since the regulations under IRC Section 423 were amended, including changes that help facilitate a global ESPP offering, so it’s a good opportunity to take stock of the issues companies face when designing and implementing their ESPPs—and, of course, ways to avoid them.
NASPP: What common mistake do companies make with global ESPPs and how can they avoid it?
June Anne: Many companies fail to review their corporate tax structure when deciding which entities to include in the ESPP, particularly when an ESPP is offered globally and certain countries are excluded. In addition, when adopting country-specific terms or rules to comply with non-U.S. laws (e.g., inclusion of part-timers to comply with a European Union directive), it is essential to understand the ownership structure and tax status of each employer company so as to avoid running afoul of Section 423’s employee coverage or equal rights and privileges requirements. If these key requirements of Section 423 are not met, the tax-qualified status of options granted under the plan could be in jeopardy. As companies tend to change their corporate structure all the time, companies need to review their corporate tax structure in advance of every offering period, when designating the subsidiaries eligible to participate in the ESPP. There are other strategies to minimize risk in this area, but you’ll have to come to our session to find out what they are!
NASPP: What is the silver lining to your topic?
June Anne: The silver lining is that it is possible to implement an ESPP globally without running afoul of Section 423 and the varying legal requirements around the globe. We’ll definitely be diving into a few ESPP horror stories in our session, so perhaps the biggest silver lining is the sense of relief our audience will feel at (hopefully) not having had to face such scenarios in their own work lives! And for those that have lived through ESPP mistakes, the silver lining is the lesson learned and the errors they won’t repeat.
NASPP: What is something you learned from the NASPP?
June Anne: I have learned a number of things from attending NASPP conferences and webcasts over the last several years, and by logging onto the NASPP website. Relevant to our session, I attended the “IRS and Treasury Speak” session on the proposed Section 423 regulations and the session on the final regulations the following year, and found these sessions to be very informative.
About the NASPP Conference
The 22nd Annual NASPP Conference will be held from September 29-October 2 in Las Vegas. This year’s program features 60+ sessions on today’s most timely topics in stock compensation; check out the full agenda and register today!
Our popular “Meet the Speaker” series, featuring interviews with speakers at the 22nd Annual NASPP Conference, is a 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 an interview with Takis Makridis of Equity Methods, who will lead the session “Accounting Principles for Stock Plan Administrators.” Here is what Takis had to say:
NASPP: What is a common misperception about ASC 718?
Takis: ASC 718 can feel very arbitrary. There’s a laundry list of “rules” to memorize, which is stressful and contributes to the feeling that ASC 718 just amounts to a bunch of hocus pocus. Our topic is NOT about reiterating all those rules so that people can memorize them just a little bit better. Rather, our session is motivated by the view that ASC 718 is not a laundry list of arbitrary rules. Conventions like dynamic forfeiture rates, equity classification versus liability classification, deferred taxes, and the floor provision tie back to a conceptual framework in accounting. Our goal is to share key aspects of that conceptual framework—which is far bigger than ASC 718—so that all the ASC 718-specific conventions can be understood as existing within a broader accounting policy ecosystem. By understanding the concepts that lead to the rules, our hope is that the rules are not only easier to implement, but also that grey areas can be more readily resolved. This is how we hope to make our presentation different and meaningful.
NASPP: What actions should companies be taking now?
Takis: Companies should take a careful look at their accounting calculations and procedures with an eye toward WHY things are being done the way they are. Link every calculation back to a principle in ASC 718. When there is not a clear principle to link to (e.g., an elaborate performance-based award), what is the reasoning and documentation in support of the current approach? Does it make sense in light of the accounting concepts underpinning ASC 718? “We do it this way because we’ve always done it this way” can be a very dangerous strategy.
NASPP: What is the silver lining to ASC 718?
Takis: ASC 718 makes a lot of sense! <Cringe> ASC 718 is much more “principles-based” than many other standards in US GAAP. Of course the standard is filled with rules, but an effort was made to base those rules off fundamental accounting principles. When you can see the rules as stemming from the broader concepts underlying US GAAP, it becomes much easier to resolve complex cases involving a lot of grey and no specific guidance.
NASPP: What is something you learned from the NASPP?
Takis: The NASPP does an incredible job of bringing experts together from very different disciplines. This is extremely cool and also rare, but it leads to far more holistic perspectives. When we all leave the Conference and go back to “the real world,” it’s essential that we have the tools to look at unique problems holistically, and I feel the NASPP has challenged me to do that in a productive way.
About the NASPP Conference
The 22nd Annual NASPP Conference will be held from September 29-October 2 in Las Vegas. This year’s program features 60+ sessions on today’s most timely topics in stock compensation; check out the full agenda and register today!