Cost control is essential to the financial success of your company. There's simply no room in the budget for wasted dollars.
Consider how you administer your equity plans today. Equity plans have many moving parts. Administering your plan in-house can require your team to work on far too many time-consuming and labor-intensive tasks. Because it is nearly impossible to determine how much of their day is being spent on this you cannot put a tangible cost on it. And as your plans grow in size and complexity the potential of penalties and fines linked to missed or inaccurate filings or reporting becomes a real thing that can put a big deficit in your budget.
Which has got to make you think — is your plan, and the cost of managing the complexities, outgrowing your current in-house structure?
Manual, in-house administration may seem easy and cost effective when your plans are simple. But as you grow, and your plans become more complex with multiple offerings and transactions, as well as more participants you need to start thinking about the costs associated with the added difficulties of managing in-house. Here's just a handful of key areas to consider when you realize you may, in fact, be outgrowing your current administration.
Blackout periods
It is crucial that no transactions are performed during blackout periods. With a greater number of plan complexities and transactions you must have the right controls in place to avoid hefty fines and reputational risk that can potentially do some pretty significant damage to your company.
Insider trading
Because insiders have access to sensitive, non-public information, insider trading cannot be overlooked. Any single company stock trading mistake from any single senior executive can present both financial and legal issues.
Employee communications
As the number of participants increases you need to properly, and more frequently, communicate to your employees. Communications should create engagement and provide a greater understanding of how the plans work proving the value to your participants while getting the return you need to see.
Plan complexity
Your plans can quickly become too complex when they don't necessarily need to be. Multiple plans, multiple offerings and multiple transactions can be hard to manage. And, trying to manually manage the ins and outs of these complexities can leave too much room for error leading to unnecessary costs to your company.
Manual recordkeeping
Manual recordkeeping may seem like the most cost-effective way to manage your plans, but the fact is it comes with many disadvantages. Lack of data security and challenges in ensuring data accuracy can be serious issues that generate many unforeseen costs.
Botched payroll files
Your employees are counting on you and trusting you with their financial future. Payroll files must be right every time. You may no longer have enough internal resources to review these files. Your chances for errors multiplies as fast as your participant base does.
As your equity plans grow in number and complexity these key areas will only multiply. A better way to manage your equity plans, and the costs surrounding them, is to partner with an industry expert who can provide an array of equity administration solutions. Too big to continue in-house administration? Outsourcing your plan administration can help you normalize costs across the board for your company. You'll know what to expect and, even better, you'll know the actual cost. And, with the right provider you can rest assure that you'll adhere to the latest regulations from privacy to compliance so you can focus on driving your company's financial success.
Ready to start actively controlling your costs? We thought so.
Computershare has been in the business of helping companies like yours with efficient and effective equity plan administration solutions, managing costs while delivering top-level service to your plan participants and administrators for over 40 years. Visit
computershare.com/equityplans-us or complete the form below and one of our plan solution experts will contact you.