How well are your equity plans working for you today? Have you even had the time to think about this? There are lots of complexities and responsibilities associated with equity plan administration. As a financial leader in your organization, you want to minimize the costs associated with your plan while mitigating regulatory and compliance risks.
If you're currently administering your equity plan in-house can be expensive when you consider the costs in resources required to manage the plan, answer questions from participants, and stay on top of changing tax laws, regulations and filing deadlines to avoid unnecessary fines or penalties. All this may have been manageable once when your company was new, your equity plans simple, and the participants few. But as you grow in size and complexity (both your company and your equity plans), all this may be more than your team can handle.
With this in mind, here are five ways outsourcing can improve your equity plans program.
1. Increase accuracy
Ensuring data accuracy is critical to your success and overall compliance. Errors can lead to delays, transaction errors, and unwanted calls from plan participants. All that adds up to lost opportunity costs from wasted time. Eliminate manual processes and unnecessary paperwork by outsourcing your equity plan administration to an experienced provider with automated tools to immediately improve accuracy.
2. Reduce risk
Equity plans have risks you need to avoid—monitoring executive transactions to ensure they adhere to the right transactional periods and filing deadlines, complying with privacy laws and blackout periods, and following tax mobility regulations. The more of these you have to manage, the more difficult it becomes to do it all in-house. Outsourcing your equity plan administration can ensure controls are in place to mitigate these risks. Working with a partner who is governed by a comprehensive regulatory regime means you will be compliant every step of the way, and better yet, you won't have to worry about it.
3. Control costs
Outsourcing your equity plan to an experienced, knowledgeable, industry leading provider means you'll have access to the most efficient and cost-effective way to manage your plan. In addition, having a partner that understands the latest tax laws and regulations means no surprises of unnecessary penalties and fines.
4. Forecast and expense more accurately
Your equity plans are an expense for your company, just like any other compensation. That's why you need to properly expense them to ensure your company receives the appropriate corporate tax benefits. The more plans you have, the more complicated this becomes, and the greater chance for error if managing this manually in-house.
The right outsourcing partner will include financial reporting as part of their offering. If fully integrated with the administration system (which it should be), all the necessary data from your equity plans is automatically pulled into your financial reports. Calculations are also automatic. And just as important, this type of tool allows you to better forecast expenses for the future.
5. Modernize your equity plans
Your equity plan can be a great tool to attract and retain talent, but only if it is competitive in the marketplace. What are other companies offering, especially your competitors? The right outsourcing partner helps you with a regular review of your plan and delivers the latest trends in the types of plans executives want.
Ready to start outsourcing your plans?
Computershare offers a fully outsourced solution for administering your equity plans that helps you actively control costs, cut unnecessary risk and forecast for the future to position your company for financial success.
Fill out the form below and one of our plan solution experts will contact you.