So you’ve launched your employee stock plan, what’s next?
Read on to learn about the techniques and tactics you can use to help it stand the test of time.
Administration
Review it
Regular reviews of the plan by a full, senior team are invaluable in refocusing and realigning your employee stock-based compensation with the company’s overall strategy. If you are the main administrator of the plan, ask provocative questions to challenge what’s gone before and stimulate new thinking in the group.
Digitize it
If your employee stock purchase plan (ESPP) or long-term incentive plan (LTIP) is on a spreadsheet, you may be running into all sorts of problems. Bring your plan onto a digital platform that allows you to keep an accurate account of ownership, model future scenarios, analyze potential outcomes of decisions, and streamline your stock plan administration process.
Measure it
Numbers have a lot of persuasive power, especially when you’re trying to get buy-in from senior management for future decisions. Start collecting the basic numbers – enrolment rates, percentage of stock that are employee-owned, etc. – and work up from there.
Professionalize it
Often, particularly when companies are in that early and rapid growth phase, the employee stock plan is administered by someone in-house without a great deal of experience in stocks, shares, equity and everything else involved. Engage with a stock plan service provider (like us) and you’ll soon see how much you can leverage from your equity compensation packages.
Communication
Market it
One of the biggest challenges around employee stock plans is communicating the benefits to the employees. The mindset needed is that of a marketing campaign – you need to hit people at the right moment with the right message and a clear call to action.
Explain it
Letting the employees know about the benefits of the compensation plan is one thing, explaining the details to them is another. Run workshops so people can ask questions in person, show examples of how it works in real life, and then provide supporting materials on a regular basis.
Deadline it
People need deadlines, especially when it comes to a decision they don’t necessarily have to make today. Setting key deadlines around enrolment and vesting dates will focus the mind of current and potential participants. Set dedicated time aside, company-wide, to allow them to complete the required steps.
Automate it
Good communications require accurate information, timely delivery, and automation of your share plan is a big step towards achieving that. By integrating payroll, HR, tax, accounting and other reporting systems to an equity administration platform, your participants will always have up-to-date information at their fingers tips while you can generate reports at the click of a button.
Inspiration
Renew it
It’s so easy to do something because that’s the way it was done before. Simply updating materials (like adding new participant success stories) wherever possible will keep the messaging fresh and keep it in the minds of people within the company too.
Champion it
Numbers, especially financial numbers, can be intimidating for a lot of people. Turning dry figures on a sheet into a compelling story is not an easy task, but the best way of connecting the benefits of the plan to the employee is through internal champions telling their own stories.
Leverage it
An employee share plan can be used to attract and retain talent – if they don’t sit on the shelf or in people’s emails. Promote the plan internally and externally, put it into job specs, mention it in PR stories, and everywhere else you can.
Are you looking to improve your employee share plan and leverage it for growth? Get in touch with our expert team by clicking on the link below.
