How risky is an outsourced equity plan? It’s an honest question. It’s one that, if you currently administer your own equity plans in-house, you are likely asking yourself daily.

As a financial leader in your company, you know outsourcing is a strategic decision that can let you re-allocate in-house resources to other important priorities, eliminate manual processes that can lead to errors, and let you better forecast expenses with agreed-upon, contracted costs. Choosing the right partner adds value to your company. But choosing the wrong partner can lead to significant costs and reputational risk that you simply can’t afford.

Before you decide to outsource your equity plan, consider the following pitfalls you may encounter if you don’t pick the right partner.

 

1. Planning only for today

Right now, you know what you need. You know the plans you offer, and the resources – both financial and people – required to execute them successfully. But if you limit your vendor choice to a partner who only serves your needs today, you may find it costing you more down the road. Consider the future of your company and where you’ll be in the next three to five years and beyond.

Will you be expanding into other countries? Is an acquisition or merger in your future? What will be the hot equity awards of tomorrow? You need a partner that aligns with your business strategy and shares the same vision for your company as you do.

To meet your company’s ongoing equity plan management requirements, look for a partner who is flexible and has the capacity to seamlessly execute your plan administration no matter how much you grow. They must also have the expertise and experience to provide financial reporting that is easy to use, compliant with appropriate rules such as IFRS2 and U.S.-GAAP accounting rules, and is fully auditable, helping you forecast for the future.

2. Lack of communication with your service provider

You know that vendor you never hear from…at all? There may be some tasks you can outsource to a “silent” service provider but managing your equity plans is not one of them. This is equity, this is compensation, this is share ownership – and a major financial responsibility for your company.

And your vendor cannot just be reactive. It’s great they pick up the phone when you call, but they should be calling you, too, providing you with assistance to help you stay current in regard to tax laws and regulations, ensuring executives are adhering to the right transactional periods and filings, and supporting your mobile employees with the right tax requirements.

You have to get it right every time, so you need a dedicated, experienced team at your fingertips to support you, a virtual extension of your company’s finance team.

3. Working with a one-track partner

You’re always thinking about your company’s future, and your partner should be too. Choosing a vendor who can provide multiple products to meet your needs as you grow and expand means you can reduce your vendor list, pay fewer invoices and reduce costs associated with sourcing additional partners. Look for a partner who can do more for you and offer you valuable products and services now and into the future.

4. Choosing price over expertise

It is so tempting to go with the lowest-cost provider. Budgets are tight, especially today, and all organizations are being asked to do more with less. But remember, the vendor you choose is managing the equity awards for your senior-most executives, including the CEO, the CFO, and others who require a higher level of service. Your company’s leadership is expecting those awards to be managed right. They don’t want any delays or errors happening along the way.

When reviewing vendors, focus first on the quality of the services, consider who will best meet your company’s goals today and tomorrow, and then look at cost. Choosing the right service provider, will pay off in the long run with the added value they provide. You (and your company’s top executives) will be glad you did.

Ready to learn more?

Choosing wisely means you look beyond the immediate need and focus on the big picture. And that’s where Computershare comes in. Work with a partner who has you covered, an industry leader that is in it for the long haul. A partner who can provide multiple services as needs arise.

Visit computershare.com/equityplans-ca or complete the form below and one of our plan solution experts will contact you.


Due to Canada's Anti-Spam Legislation, we are required to obtain your consent to send you commercial electronic messages. By selecting 'Yes' and submitting this form, you consent to receive electronic marketing messages from Computershare Canada and its affiliates about the topics noted above. You can withdraw your consent at any time by clicking on the unsubscribe button which is available in all electronic communications. To find out how we collect, use and safeguard your personal information, please refer to our Privacy Code.

*Includes Computershare Canada Inc., Georgeson Shareholder Communications Canada Inc., Computershare Governance Services Ltd. and their majority owned subsidiaries operating in Canada (collectively referred to as "Computershare Canada").