4 benefits of managing your Employee Benefit Trust using an information management platform

In today’s competitive job market and globalized business environment attracting and retaining top quality staff is a major factor for HR and Rewards & Benefits departments. Standing out from competitors as an employer of choice or finding ways to link employee goals with the targets of the company itself can also often prove to be major challenges. Granting equity compensation awards to employees is one way in which companies have found to address these and the results show that making employees stakeholders in the business can have a hugely positive impact.

Employee Benefit Trust (EBT)

Before introducing a new equity compensation scheme or adapting an existing one there are many things which need to be considered such as what plan type to go with and how it will be managed. One option available is to set up an Employee Benefit Trust (EBT).

This is a trust under which property, such as shares in the company, is held on behalf of the employees. An EBT is a discretionary trust held by a trustee for the benefit of beneficiaries, who will normally be the holders of the shares, i.e., the plan’s participants. It is important to note that it is not only public companies who can operate an EBT, as unquoted or private companies can use this route to create an internal market for their own company’s shares.

Of course, operating such a scheme may come with an increased workload for HR and Rewards & Benefits departments which is why many companies find that adopting an information management platform, such as those offered by J.P. Morgan Workplace Solutions, can be hugely beneficial, e.g. when it comes to tracking share ownership, vesting schedules, etc.

Eleanor Yip, Head of Trust Team, Equiom Corporate Services, Hong Kong a trustee service provider based in Hong Kong, who focus on Employee Benefit Trusts, shared her top 4 considerations which administrators should have front of mind when researching an information management platform to use in tandem with their Employee Benefit Trust.

1. Going digital can streamline your EBT Information Management

“For administrators, finding a system that allows you to eliminate the need for manual record-keeping should be central,” says Eleanor. “This will help to simplify the process of tracking and monitoring stock holdings while reducing the administration burden and cutting down on the risk of manual errors slipping in.”

2. Your employees will thank you for going digital too

Adopting a platform which offers a centralized hub for participants to view and manage their stock options can give participants access to real-time updates and easy access to relevant information which can really help to bring their awards to life for them.

“Find a system that lets your employees conveniently view their vested shares, exercise options, and track performance. Make sure your provider can offer a user-friendly interface, especially one that emphasizes and enhances transparency and engagement,” says Eleanor.

3. Compliance and Regulatory Support for both Employers and Employees:

Managing insider trading and ensuring compliance with regulatory requirements can be a daunting task for companies no matter what their size.

“Your information management platform should simplify the process of meeting regulatory obligations Seek out a provider whose platform can assist in maintaining compliance by monitoring and managing insider trading activities, ensuring adherence to legal and regulatory frameworks,” says Eleanor. “Additional benefits to watch out for are access to robust reporting tools which can generate real-time reports. This can not only help to save time and effort for your teams but may also mitigate the risk of non-compliance and potential legal consequences.”

4. Efficient Stock Trading Solutions for both Employers and Employees:

“Finding a platform which offers convenient stock trading solutions can enable participants to execute transactions seamlessly and get them even more engaged with their rewards,” says Eleanor. “Check if your provider’s platform can integrate with the relevant major stock exchanges or can provide access to trading options. Facilities like this can help empower employees to make informed decisions regarding their stock options, thereby facilitating liquidity and maximizing the benefits of stock incentive programs.”

For administrators where employees can conveniently sell vested shares or exercise options directly through the platform this can eliminate the need for third-party intermediaries, cut down on the administration burden and even help reduce transaction costs.

Find Out More

By utilizing an information management platform to manage their EBT or other forms of equity compensation plans companies may find they can streamline information management, ensure compliance, and provide efficient stock trading solutions to their employees. This may not only enhance the overall employee experience but also save time and resources for the company. As we move towards a more digitized and interconnected world, leveraging technology platforms becomes more and more crucial in optimizing the administration of employee benefit trusts and maximizing the benefits for all stakeholders involved.

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At J.P. Morgan Workplace Solutions we work with companies from around the world every day to help bring their reward strategies to life. Our tech and service-based offering was created to empower employees to easily navigate their workplace incentives with confidence.

Get in touch and find out how you too can begin reaping the benefits of equity compensation.

Employee ownership, simplified – it’s what we do.

JPMorgan Chase & Co., its affiliates, and employees do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal and accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transaction.