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Five questions you MUST ask prospective stock plan admins

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Are you under pressure to change your stock plan administration provider?

Deciding to move on from an incumbent stock plan administrator or stock plan software provider can be daunting – even more so if you’re moving on through no fault of your own or because your existing provider can no longer offer the service you need.

Many companies stay with the same company for many years – it’s a matter of trusting the devil you know and staying with a provider long after they have outgrown them.  We’re not here to say that you should run straight out and start the migration to Global Shares. We do believe, however, that we can offer solid advice on the things you should be considering if going into a procurement process for a new provider.

Do you want to work with a dedicated team that knows you well and has the independence to move with you, or is something less personal OK for your needs?  Do you need software only, a SaaS model of service, or do you want peace of mind in a fully outsourced solution?

The bulk of share plan administrators and software providers are now selected through a Request for Proposal, “RFP”, process.  The details of how to run this type of RFP must be tailored to the requirement of each company for itself, according to what matters to it most.

Generally, the specifics of your stock planning RFP will be driven according to:

  • The jurisdictions of your operations
  • The jurisdictions of your participants
  • The stock plan types you operate
  • Your own industry.

If you feel that your time with your current provider is done, or if you’re approaching a stock plan management company for the first time, there are some key questions you should ask any prospective provider during your request for information.


1. Is it a fully outsourced solution, bundling administration and software, or SaaS only?

Often RFPs can be structured to assume one approach or another.  Asking this question up-front in an RFP allows you to tag your questions as for “Full Outsource Respondents” or “SaaS Respondents”.

This will allow tendering respondents to answer what’s relevant to their service and allows you clarity regarding responses and means you can avoid reading through countless “non-applicable” or “see above” type answers clogging up a document.


2. Has the provider got experience in administering plans in all of the countries where you operate the plan and, if not, can they show credible proof they will be able to?

You would hope that respondents will provide clarity about their ability to offer the services you need, but there is always a chance that they will not be sure of what is involved in a given jurisdiction.  Asking this question outright allows you to review the credibility of each tenderer on a clear basis.


3. If there is another company that you want to work with, for example as a trustee or broker partner, can your RFP respondents work with them?

This can be a red-line issue for some issuers, as while they might want to move administration and upgrade the software platform, they may have years or even decades working with another partner without issue and they may want to continue with this relationship.

It’s important that you flag this at the beginning so that you know from then whether your new stock plan administrator will be able to work with this partner. Even if you don’t have a key partner in mind, knowing the answer to this question will display a provider’s ability, or lack thereof, to adapt their solution to your needs.


4. Is the solution future-proof? Can the platform and the team behind it, adapt and expand with your needs?  Will any future solutions mean future migrations to different platforms, or does the provider offer all its services through one platform?

Simplicity is key here.  Our experience tells us that you want things as simple as possible.

If you have an LTIP you don’t want to have to implement a new ESPP on a separate platform.  You want it in one place, with a company that knows that they can accommodate both plan types equally well.

Some providers have more than one software and different plans mean different systems.

You have been warned!


5. What’s the company’s ethos?

Despite the importance of the service, the data protection accreditations, the software, the location and everything else we’ve covered, you’ll pick a team you can trust. 

Once you’ve asked the key questions, take the time to ask a few leading questions and they will pay dividends in helping you be sure you want to work with the company.

The above questions will help you sift through a lot of noise and will help you to define what’s a priority for your company. Whether it’s efficiency, trading solutions, the participant experience, data security, regulatory compliance or pricing – asking the right questions will help you figure it out.  

While there are other considerations in play, these will cover the bulk of how an RFP is written and, knowing these, an RFP team could provide a solid draft of an RFP for use in a procurement process.


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See how working with Global Shares will transform how you manage your employee stock plans and harness the power of employee ownership.

Please Note: This publication contains general information only and Global Shares is not, through this article, issuing any advice, be it legal, financial, tax-related, business-related, professional or other. The Global Shares Academy is not a substitute for professional advice and should not be used as such. Global Shares does not assume any liability for reliance on the information provided herein.

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