What You Need to Know About Outsourcing Equity Plan Administration

Are you thinking it's time to outsource the administration of your equity plans? If you find you and your team bogged down with the day-to-day minutiae of managing your plans in-house, the time might be right.

Outsourcing gives you access to a team of experts in equity plans who not only take on the task of administering your plans, but help you stay ahead of the curve on changes in government regulations and tax laws. The right partner also has the resources to help you evolve and expand your plans to stay in alignment with your own company's growth and remain competitive in the marketplace.

But before you take the plunge, there are a few things you need to know to ensure a smooth transition from your current in-house program to a fully outsourced one. Follow this handy checklist to get yourself ready.

1. Understand all the moving parts of your plan administration workflow.

Administering equity plans is a complicated process that involves a range of internal departments including finance, tax, treasury, legal, and more. Efforts may be compartmentalized and uncoordinated, potentially creating work overlap. Step one for outsourcing your plans' administration is to understand how your plans are currently managed internally.

2. Be clear about who does what, and how much it's really costing.

Knowing who handles what of your plan administration ensures their input is solicited and interests are met by any potential external sources. You may be surprised to see how many employees are working on similar administrative tasks, ultimately adding up to unnecessary waste in company resources.

3. Ensure internal alignment with company goals.

Your internal team must be on-board with decisions made. You need this team's support through every step of the process, ensuring they have a clear understanding of the goals behind outsourcing your equity plan administration. Everyone working towards the same goal will be the difference between a successful transition and a disaster.

4. Appoint your 'go-to'.

Assign a single point of contact to be responsible for communicating, both with your internal team and your outsource partner. Situational awareness over the outsourcing process is crucial. Be sure this person can and will provide oversight, rapid adjustments, coordinated planning and efficient decision making throughout the entire outsourcing process.

5. Prepare for every detail.

Nothing ruins good equity plan administration like missed filings, botched stock purchases or unhappy participants. You'll need to pay attention to every detail of the plan's workflow, so nothing falls through the cracks. Any errors or slip-ups that create a delay is really costing you money.

6. Communicate!

Share timelines, explain objectives, outline expectations, and above all, solicit honest feedback from all of your plan stakeholders. This needs to include the external vendors you choose – they can't help you if they don't know what you know, want and need.

7. Find out where the problems lie, and solve for those first.

There are often pain points associated with internal plan administration. Uncover them as early as possible and make sure your outsource partner is equipped to handle those pain points so they are no longer an issue moving forward.

8. Know what you need. Clearly define specifications, then find a vendor for them — not the other way around.

Clearly define specifications around your equity plan administration. Then, find a vendor that can help you! Making sure your specifications are properly defined and working with a vendor who knows what those specifications are up front means they are truly committing to meeting your needs and ensuring success. Save yourself time and money by choosing the right vendor up front. Be sure to take advantage of the expertise and technology your vendor will provide.

9. Assemble metrics to measure outcomes.

When defining the workflow and pain points mentioned above, establish baseline assessments of your internal plan administration. Tracking things like efficiency, labour hours spent, data errors, overall participant satisfaction, the severity and frequency of compliance issues, etc., are important to measure the success of outsourcing your plan administration. You'll be able to prove money well spent and forecast for the future.

10. Start early!

There is no substitute for time when tackling something as complex and multi-faceted as equity plan administration. Be sure to budget enough time for things to go wrong. You can't afford to sacrifice the success of the project in the name of unrealistic or arbitrary deadlines.

Ready to take the outsourcing plunge?

Computershare has been helping companies like yours transition to outsource models for more than 40 years. You'll have access to a team of experts to help you every step of the way, from smoothly moving your plans onto our systems, to managing the day-to-day minutiae of your plans, to providing strategic advice on plan design best practices so the plans you offer stay competitive in the marketplace. You'll also have access to a wide range of communication and support tools for plan participants, including a team that provides dedicated support for your named executives.

Fill out the form below to speak to one of our equity plans experts, or learn more at computershare.com/equityplans-ca.