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Employee Stock Plans

Removing Silos – Focusing on equity compensation in the lead up to a liquidity event

Content Team February 6, 2024 mins read

About the team

J.P. Morgan Workplace Solutions’ Content Team comprises a dynamic and talented team of writers and experienced professionals who strive to deliver useful equity insights and simplify complex equity information, all with the aim of helping you to better understand equity management.

Removing Silos – Focusing on equity compensation in the lead up to a liquidity event

The preparations surrounding an IPO, buy-out, merger, acquisition or other liquidity event can be a time of great excitement, stress and focus for a company, as preparations are made ahead of the transaction. It is understandable then that while individual areas or departments might need to become hyper honed-in on certain tasks it’s essential that a silo mentality does not develop.

Silos occur where different teams are not communicating properly, meaning resources, skills and information become trapped. It’s something that can affect businesses of all sizes and may result in confusion, discontent, crucial tasks being overlooked in error or even work being unnecessarily duplicated.

For those in Rewards & Benefits or HR Departments it’s especially important ahead of a liquidity event to monitor that this does not occur in relation to their company’s equity compensation plans. Those employees with an equity plan will be eager to learn how they might benefit financially and keeping them motivated at this crucial time will be of the utmost importance. While you might not have all of the information they desire available right from the start it is essential that what you do have does not become siloed away.

Clear communications

Silos represent divisions between people or groups within an organization and a time of change is the perfect opportunity for miscommunication, misinformation and bad intelligence to run rife.

If you have been managing a clear and open equity compensation communications strategy up until this point then now is not the time to stop. If you have not been doing so, then now is a good time to start. Be consistent with sending out your messages. If there is no update it’s okay to say this rather than just cutting off all communications completely. That’s often how rumours get started. 

Through participating in an equity compensation offering your employees will have technically become shareholders in the business, so you will want to be as open with them as you would any other stakeholder.


Keep the conversation going

Consider how you have communicated change at previous critical times and remember your employees are on the same journey as your company’s leaders. It’s not just those at the top who need to be kept informed. By establishing a clear and open dialogue you create a level of transparency and trust.

Through informing your employees what could potentially happen at each stage along your company’s journey you can also bring their equity awards to life, which can inspire them as they work towards new goals. What’s their role in helping to achieve this and how might they benefit from it? A liquidity event is a crucial juncture for everyone so maintaining motivation is imperative.

Centralize information

Simplify. Give your employees one place to go for everything they need.

Having a designated and organised equity compensation-related hub of information will help. Is there someone you can designate as a point-of-contact? Is there a mailbox that your employees can send their queries to? Could you set-up an FAQ or wiki page on your intranet and direct staff to it? Whatever option you choose just make sure you let your employees know about it.

Realize who needs to be in the room

Silos develop when different areas within the same business don’t share information, so take the time to really look at and determine what departments need to be at the table and at what stage along the way.

Do you need input from your legal teams, tax specialists, payroll department or even from your external equity plan provider? Leverage the resources already available to you to help provide your employees with the knowledge they’ll need as things progress.  

Remember, who you need input from will likely change throughout the course of the liquidity event, but by creating and encouraging an open environment you can keep all levels of the business informed, involved and motivated.

What can your equity provider do for you?

Lean on the supports that are there. Reach out to your equity management provider – ask them the questions that you need to know the answers to. As a Global Shares client you will have a CRM appointed to guide you through the process – remember, they’re there to help.  

Success by rewarding loyal employees

It’s easy to get distracted when considering all the external factors taking place – but don’t forget to turn some of that focus inwards. An IPO, merger or acquisition will often be the end result of a long-term focused business strategy and of course an acquisition process can itself be long and complex but remember, your employees and their dedication will often be one of the key factors in your company’s success and reaching that goal. You’re all in this together.

For more information about how an equity compensation plan could benefit your company talk to us today about how we can help develop an equity plan to meet your needs.

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

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