As a stock plan administrator, you’re at the center of one of your company’s most powerful tools for employee retention and long-term value creation. The right equity compensation tools can drive performance, employee loyalty, and alignment with business goals—but only when they’re carefully managed.
To help you stay focused and strategic, SPS/GZ has outlined 6 key objectives every stock plan administrator should prioritize. By mastering these areas, you’ll not only minimize risk and ensure compliance but also create a stock plan experience that inspires and empowers your workforce. SPS/GZ has expertise in these areas and can help your company stay compliant while managing a successful equity compensation program.
1. Employee Engagement and Communication
The most powerful stock plan is worthless if your employees don’t understand its value. Clear, ongoing communication is critical to increasing participation and maximizing the perceived value of your equity program.
How you can achieve this goal:
- Offer periodic employee presentations and webinars to help employees better understand the value of their equity compensation offerings.
- Send a survey to equity participants to help gain insights.
- Use data to understand whether equity awards are meaningfully driving motivation and performance.
- Consider tailoring awards (RSUs, stock options, ESPPs) to fit different employee profiles and expectations.
2. Equity Plan Designs that Work
Equity should be a tool for inclusion and motivation—not just an executive benefit. A well-designed equity plan gives every employee a stake in the company’s future, fostering motivation and retention. It is important to consult with experts in plan design before rolling out new stock plan programs to employees.
How you can achieve this goal:
- Conduct a review of equity participation rates across departments, levels, and geographies to identify and address disparities.
- Use data to understand whether equity awards are meaningfully driving motivation and performance.
- Consider tailoring awards (RSUs, stock options, ESPPs) to fit different employee profiles.
- Periodically revisit your plan design to keep pace with company growth and employee feedback.
3. Top-Notch Technology
Utilizing the best technology in the industry helps keep your equity plans running smoothly, eases the burden on financial reporting, and aids with compliance measures. Many companies choose to align with the best brokers in the industry who employ highly trusted and secure platforms.
How you can achieve this goal:
- Review your current software’s reporting and compliance capabilities to ensure they are current and up to industry standards.
- Leverage modern equity administration platforms that support automation, integrations, and real-time reporting
- For companies tracking stock plans in Excel, review current offerings in the marketplace and attend conferences to learn more about the industry offerings.
- Standardize and document granting, vesting, exercising, and taxation processes.
- Ensure that your platform has security measures in place, such as multi-factor authentication and data encryption.
4. Compliance: Stay Ahead of the Curve
Stock plans are governed by a complex and evolving set of global regulations, including tax laws, securities rules, and accounting standards. A single compliance error can expose your company to fines, reputational risk, and legal consequences.
How you can achieve this goal:
- Conduct routine internal audits, even informal ones, to validate participant data and plan records.
- Stay current with changes in regulations such as Section 409A, IRC 162(m), ASC 718, and international tax treaties.
- Hire qualified external audit, tax, and legal firms.
- Consider using a third-party outsourcing firm, such as SPS/GZ, to manage all transactions and complexities of your company’s stock plans.
5. Maintain Accurate and Current Financial Reporting Practices
Equity plans affect your company’s financial statements, so precise accounting and transparent reporting are essential. Misstatements can undermine investor confidence, delay earnings releases, and trigger audit issues. Utilizing qualified professionals goes a long way in keeping your company’s financial statements compliant and transparent.
How you can achieve this goal:
- Hire experienced internal staff and external auditors
- Collaborate closely with your finance team to ensure accurate expensing under ASC 718 or IFRS 2.
- Track forfeitures, modifications, and performance metrics that impact expense recognition.
- Ensure proper valuation methods (e.g., Black-Scholes, Monte Carlo) are being used for different award types.
- Prepare for audit readiness with thorough documentation and reconciliations.
6. Build a Top-Notch Administration Team and Leverage External Resources
Having a professionally trained and highly experienced stock plan administration team in place helps companies deliver the goals of a successful employee stock plan program while maintaining compliance and accurate financial reporting practices.
How you can achieve this goal:
- Companies that do not outsource should consider hiring highly trained and certified professionals (CEPs and CPAs).
- Ensure that there is a designated person or team (internal or external) to cover all major compliance tasks.
- Partner with third-party administrators, such as SPS/GZ, to manage compliant and successful stock plan programs.
- Build strong working relationships with external auditors and attorneys.
In Summary: Elevate Your Equity Program with Purpose and Precision
Your role as a stock plan administrator is more strategic than ever. When you focus on compliance, inclusive design, impactful communication, operational excellence, and sound accounting, you turn equity from a transactional benefit into a strategic advantage.
Need help evaluating or enhancing your stock plan processes? SPS/GZ can help you build an equity program that drives value, supports growth, and keeps your employees invested—literally and figuratively.
