Equity compensation is becoming increasingly important in helping companies attract and retain key employees in the increasingly competitive marketplace for talent. Equity compensation represents a form of ownership in the company and provides employees with a vested interest in making sure the company runs well – the better the company performs, the better the employees and the company interests are aligned.
What is Equity Automation?
Equity automation is the term we use to describe the process of automating the administration of your equity compensation plans. Historically, the recordkeeping of equity awards tended to be a highly manual process, usually involving the use of spread sheets to track grants, manage vesting schedules, and relay pertinent information to employees via an annual statement, or other manually created documents. This has been especially true for smaller start-up companies and other private or public firms that have not relied as heavily on equity awards.
By automating or streamlining the administrative process, companies can gain many benefits including: reduced costs of the program, reduced time and resources to manage the plan, an improved participant experience, and an overall reduction in the potential risks of transactional or reporting errors inherent in a manual process.
Online/no longer paper based
The most straight-forward method of automating your equity compensation practices is to get your recordkeeping online. This means you can get all employee inquiry and transaction access online and can eliminate the need to produce any more paper statements or notifications. Online employee access can also significantly reduce the number of inquiries that need to be handled by your in-house plan administration group.
Once the records and employee access is online, automation means that you can “connect” other support systems to your equity awards administration system streamlining the entire process. In this way, payroll, HRIS, tax, accounting, financial reporting and other applications can be connected or “synced” to further automate the administration of your plans. This also helps to track your globally mobile employees and ensures compliance with the multiple taxing jurisdictions, including US State-to-State mobility.
Saving time and money
Equity automation also facilitates significant time and resource savings – freeing-up resources for other mission critical activities, not to mention improving the overall experience and satisfaction of your employee participants. What’s more is that by leveraging the benefits of Equity Automation, you can also greatly reduce the material costs associated with a more traditional approach – i.e., reduced paper/statement costs, reduced postage, reduced handling expenses, etc.
Automating the process decreases the chance of manual errors meaning you have one less thing to worry about! Equity Automation can significantly simplify your internal audit process and boost your confidence in, and control over. your equity compensation practices. Such control can have a material impact on the financial reporting and results of your company.
In conclusion, equity automation can help you! It improves the overall effectiveness of your plans and can be a key driver in reducing expenses, eliminating process risk, and enhancing the experience for your plan participants. Equity automation minimizes the busy work so you can focus on the creativity and quality of your plan. Let Global Shares do the work for you and create the best equity package out there.
Do you have a question for the Global Shares team?
Please don’t hesitate to contact us!