Effective communication can be a key factor in determining whether a company achieves its desired goals when introducing employee equity compensation.
This will be the case regardless of whether you’re dealing with employees based in a single country or in a number of territories, but can become a more pertinent consideration in the context of a global stock plan.
That was one of the main points made by Jorge Martin, Head of J.P. Morgan Workplace Solutions for North America, during a recent webinar organized in conjunction with WorldatWork, an association dedicated to working with professionals operating in the broad compensation space.
During a wide-ranging conversation with our own Chris Dohrmann, Head of Strategic Partnerships, both went into detail on a range of topical equity compensation-related issues, taking as their starting point a discussion on Workplace Solutions’ recent Trends In Equity Compensation: 2024 Report.
Among the many eye-catching findings in that report was that supporting global employees (51%) and communicating with employees (47%) ranked as the most commonly cited admin-related pain points. During the webinar, Jorge highlighted the likely overlap between those two numbers and how communicating with global employees can be a significant challenge for companies.
“There are a variety of ways this could manifest itself. Do you have a multilingual website? Are you able to offer materials that explain equity to employes in their own local language and help them understand these things a little better? I would argue those are table stakes right now,” Jorge said.
He also cited the need to ensure that support help desks are available and can cater to the potential needs of international employees.
“Will a provider’s call center be ready to treat your international employees with the same level of care and advice that US-based employees receive? I’ve been talking to a few businesses that have international employees in Asia and they contact a call center that doesn’t have any Japanese or native Chinese speakers. That means they have to get a language line in, which makes for a clunky process and I think that impacts the value. I mean, you’re giving this award to your international employees – you have to be able to explain the value of that award in ways they can understand. It’s also important for them to feel like they’re being treated as well as their US-based colleagues,” Jorge said.
He also pointed to whatever online portal your employees will use to engage with their rewards as sometimes being an underused/underappreciated communications resource.
“A tool I think a lot of people miss sometimes is the actual equity compensation portal itself. How are you educating people along their journey? If you just granted them restricted stock, how are you communicating with them about what that means? If they have their first vest one year later, what do you communicate to them then? I ask these questions because chances are they’re going to go the website to check that out. I think companies can use that much more effectively to get the word out to their employees about these compensation vehicles,” he said.
Jorge also spoke at length about a number of other employee equity compensation-related topics. Among those were the hazards associated with companies attempting to deal with plan administration in-house manually using spreadsheets.
“Some believe it or not are still doing it on an Excel. That’s kind of scary, especially for auditors. If you’re maintaining an entire equity plan database on Excel, there’s also single person risk in the event that person leaves the organization or something happens to that individual. At that point, other people need to figure out how the calculations are done,” he said.
However, Jorge stressed that some companies – particularly those that are publicly traded – sometimes prefer to go with a blend of in-house and outsourced admin.
“As a company, you may want to keep a tight rein on some things, like executive grants, whether windows are open or closed, or form filings. But on the other hand, if you offer restricted stock and you have a quarterly vest and you stay up until 3am processing, that’s something you might want to outsource,” he said.
Jorge added that a blend of in-house admin and outsourcing is becoming an increasingly common preference for companies.
“This is the one topic that keeps coming up. The view is that they want to keep some of these things in-house and at the same time let a partner take on some of the things they don’t want to deal with anymore,” he said.
What’s next?
Workplace Solutions provides businesses of all sizes with an all-in-one equity compensation management solution. We handle all the administration so you have more time to focus on your company’s journey. Get in touch today to find out how we can assist you.
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