{"id":127873,"date":"2022-12-05T00:00:00","date_gmt":"2022-12-05T00:00:00","guid":{"rendered":"https:\/\/gs:8890\/academy\/participant-communication\/"},"modified":"2014-12-05T00:00:00","modified_gmt":"2014-12-05T00:00:00","slug":"participant-communication","status":"publish","type":"post","link":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/insights\/participant-communication\/","title":{"rendered":"Giving Equity to Your Employees: Why they need to understand it to appreciate it."},"content":{"rendered":"<h2 style=\"font-weight: normal;\">&nbsp;<\/h2>\n<h2 style=\"font-weight: normal;\"><span style=\"color: #000000;\">How does a company communicate equity incentive awards so their employees truly appreciate and understand the value of their equity award?&nbsp;<\/span><\/h2>\n<p><!--more--><span style=\"background-color: transparent; color: #000000; font-family: Arial, Helvetica, sans-serif;\">Companies always have a purpose or objective when they award equity compensation to their employees. The \u2018purpose\u2019 is often spelt out clearly in the equity plan or scheme document. <\/span><\/p>\n<p><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif; background-color: transparent;\">The three most common reasons are:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 300;\"><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\"><strong>Employee Retention<\/strong> \u2013 employees must continue to work for the company to benefit from their equity awards.<\/span><\/li>\n<li style=\"font-weight: 300;\"><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\"><strong>Long Term Incentive<\/strong> \u2013 employees must earn the benefit of the equity awards typically over three to five years.&nbsp; This is not an immediate reward, but an award that will be earned over time that will hopefully increase in value and may be impacted by the employees\u2019 hard work for the company<\/span><\/li>\n<li style=\"font-weight: 300; text-align: left;\"><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\"><strong>Link to Shareholders<\/strong> \u2013 as potential shareholders employees will act more responsibly in terms of the financial health of the company, which should lead to an increased value of the company\u2019s shares<\/span><\/li>\n<\/ul>\n<h2 style=\"font-weight: normal;\">&nbsp;<\/h2>\n<h2 style=\"font-weight: normal;\"><span style=\"color: #000000;\">Grant\/Award Communication<\/span><\/h2>\n<p style=\"font-weight: 300;\"><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\">The process begins with the initial communication of the grant or award. This can be handled in various ways. The most effective way to communicate the grant is via email with a link to a website. The employee can then access the website to see the grant details and accept the grant online. The benefits include:<\/span><\/p>\n<ol>\n<li><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\">The ability to highlight and communicate the key details of the grant, such as the number of shares, price, vesting schedule and term, and the ability to have the grant listed in a statement outlining the key details of the grant.<\/span><\/li>\n<li><span style=\"font-family: Arial, Helvetica, sans-serif;\">The ability for the employee to return to the site at any point to access the formal grant agreement.<\/span><\/li>\n<li><span style=\"font-family: Arial, Helvetica, sans-serif;\">The ability to provide specific FAQs for the employees to better understand their awards.<\/span><\/li>\n<li><span style=\"font-family: Arial, Helvetica, sans-serif;\">No paper, no postage and no manual burden of creating and distributing paper grant agreements that may be lost or misplaced.<\/span><\/li>\n<li><span style=\"font-family: Arial, Helvetica, sans-serif;\">Clear audit details as to when the grant information was accessed, when the grant was accepted, plus the ability to easily follow up with employees that have not accepted their grants.<\/span><\/li>\n<li><span style=\"font-family: Arial, Helvetica, sans-serif;\">The option to provide instructions to print, execute and give postal details when a paper agreement and &#8216;wet signature&#8217; is required.<\/span><\/li>\n<\/ol>\n<h3 style=\"font-weight: 200 !important;\">&nbsp;<\/h3>\n<h2 style=\"font-weight: normal;\"><span style=\"color: #000000;\">Company Branding and Culture<\/span><\/h2>\n<p style=\"font-weight: 300;\"><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\">The company should have the ability to communicate or reinforce its identity and culture as part of the equity award communication process.<\/span><\/p>\n<p style=\"font-weight: 300;\"><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\">New technology enables the Company to:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 300;\"><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\"><span style=\"text-decoration: underline;\">Brand the Equity Portal<\/span> so that it mirrors the company\u2019s own website\u2019s colors, fonts, wording, images, etc. The equity award website is shown as an extension of the company\u2019s own website.<\/span><\/li>\n<li style=\"font-weight: 300;\"><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\"><span style=\"text-decoration: underline;\">Post a message or video<\/span> from the CEO or from the company. It could focus on the benefits of equity compensation and what employees need to know about their equity grants. It could cover what employees can do to increase the value of the company. Or it could be a general message about what is going on in the company.<\/span><\/li>\n<\/ul>\n<h2 style=\"font-weight: normal;\"><span style=\"color: #000000;\">Grant\/Award Value<\/span><\/h2>\n<p style=\"font-weight: 300;\"><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\">Employees need to understand the current and potential future value of their resulting equity to truly understand and appreciate the current and potential future value of their grants or awards:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 300;\"><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\">&nbsp;A good equity website will reflect the current value of the equity grant based on the latest market price of the underlying shares.<\/span><\/li>\n<li style=\"font-weight: 300;\"><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\">&nbsp;Access historical market prices and graphs on company share price performance to enhance employees\u2019 appreciation of their equity grants.<\/span><\/li>\n<li style=\"font-weight: 300;\"><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\">&nbsp;Equity award calculators allow employees to estimate the potential future value of their awards and help them estimate potential tax consequences.<\/span><\/li>\n<\/ul>\n<h2 style=\"font-weight: normal;\">&nbsp;<\/h2>\n<h2 style=\"font-weight: normal;\"><span style=\"color: #000000;\">Global Challenges<\/span><\/h2>\n<p style=\"line-height: 1.5;\"><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\">A global equity incentive plan includes additional challenges such as different languages and different currencies.<\/span><\/p>\n<p style=\"line-height: 1.5;\"><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\">To ensure that global employees understand and appreciate their equity grants or awards:<\/span><\/p>\n<p><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\">An equity compensation website can be made available with translations of the text content on the website and allows for an employee to choose the language that will be used when he\/she views the website.<\/span><\/p>\n<p style=\"line-height: 1.5;\"><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\">For employees to truly appreciate their equity compensation, they need to see the details of their awards in their local currency.<\/span><\/p>\n<p style=\"line-height: 1.5;\"><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\">A good equity compensation website should allow participants to:<\/span><\/p>\n<ul>\n<li><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\">View the current value of the awards in their local currency<\/span><\/li>\n<li><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\">Model the potential future value in their local currency<\/span><\/li>\n<li><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\">Access and print transaction history (including taxes paid) in their local currency<\/span><\/li>\n<\/ul>\n<h2 style=\"font-weight: normal;\"><span style=\"color: #000000;\">Training and Communications<\/span><\/h2>\n<p><span style=\"color: #000000;\">An item that is often overlooked or not given enough consideration is employee training on their Equity Compensation. The ability to communicate and provide education to employees can make all the difference in successfully communicating the value of equity awards.<\/span><\/p>\n<p><span style=\"color: #000000;\"> There are many easy and effective ways to do this, including:<\/span><\/p>\n<ul>\n<li><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\"><strong style=\"font-weight: 600;\">Training videos<\/strong> have become very popular for employee equity compensation program training. The videos can be short, effective and inexpensive to produce. These can be easily accessible on the equity compensation website portal for employees to view at their convenience.<\/span><\/li>\n<li><span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\"><strong style=\"font-weight: 600;\">Online Communications<\/strong> with employees related to their equity compensation can be challenging, but with the right system you can email all participants simultaneously, or a select group, and easily monitor whether or not specific actions have been handled. The right equity administration system will provide the ability to follow-up specifically with those participants who have not completed specific tasks, like accepting their grant or making a tax payment method election.<\/span><br \/>\n<span style=\"color: #000000; font-family: Arial, Helvetica, sans-serif;\"><\/span><\/li>\n<\/ul>\n<h2 style=\"font-weight: normal;\">&nbsp;<\/h2>\n<h2 style=\"font-weight: normal;\"><span style=\"color: #000000;\">Employee Surveys<\/span><span style=\"color: #000000;\"><\/span><\/h2>\n<p><span style=\"color: #000000;\">One of the keys to a successful equity compensation program is to periodically gauge the effectiveness of the program. This is best done through an employee survey. Then based on the results appropriate changes can be made to the training and communications, or the program.<\/span><\/p>\n<p><span style=\"color: #000000;\">The right service provider can assist the company with creating an appropriate survey.<\/span><\/p>\n<p><span style=\"color: #000000;\">The survey should be easily accessible on the equity compensation website with the ability to easily see who has responded or not.<\/span><\/p>\n<h2 style=\"font-weight: normal;\"><span style=\"color: #000000;\">Effective Communication of Employee Equity Plans Summary:<\/span><\/h2>\n<ul>\n<li><span style=\"color: #000000;\"><strong style=\"font-weight: 600;\">Purpose<\/strong>: Understand and administer the equity incentive plan to ensure it achieves its purpose<\/span><\/li>\n<li><span style=\"color: #000000;\"><strong style=\"font-weight: 600;\">Online Award Communication<\/strong>: On-line communication is most effective<\/span><\/li>\n<li><span style=\"color: #000000;\"><strong style=\"font-weight: 600;\">Reflect Company Culture<\/strong>: Consider and tie company culture into the equity incentive plan<\/span><\/li>\n<li><span style=\"color: #000000;\"><strong style=\"font-weight: 600;\">Award Value<\/strong>: Make it easy for employees to calculate and simulate the value of their awards<\/span><\/li>\n<li><span style=\"color: #000000;\"><strong style=\"font-weight: 600;\">Global Challenges<\/strong>: Localise information to make it easier for global participants to understand and appreciate their awards<\/span><\/li>\n<li><span style=\"color: #000000;\"><strong>Training <\/strong>and <strong>Communications:<\/strong> Do not neglect training and communications \u2013 this can be your most effective tool for employee understanding and appreciation<\/span><\/li>\n<li><span style=\"color: #000000;\"><strong style=\"font-weight: 600;\">Surveys<\/strong>: Periodically survey employees and use the feedback to adjust the program, communications or training accordingly<\/span><\/li>\n<\/ul>\n<h3><strong>Request a free demo<\/strong><\/h3>\n<p><span>If you\u2019d like to see for yourself how the Global Shares stock plan administration software can help your company, book a one-on-one, no-obligation consultation today and we\u2019ll demonstrate our award-winning software.&nbsp;<\/span><\/p>\n<p><span><span class=\"hs-cta-wrapper\" id=\"hs-cta-wrapper-77d7067d-8c30-40c5-9fe8-678f18d514ff\"><span class=\"hs-cta-node hs-cta-77d7067d-8c30-40c5-9fe8-678f18d514ff\" id=\"hs-cta-77d7067d-8c30-40c5-9fe8-678f18d514ff\" data-hs-drop=\"true\"><a id=\"cta_button_5369947_fcebc18a-0f55-4c66-9065-85e0dae36986\" class=\"cta_button\" href=\"https:\/\/cta-service-cms2.hubspot.com\/ctas\/v2\/public\/cs\/c\/?cta_guid=fcebc18a-0f55-4c66-9065-85e0dae36986&amp;placement_guid=77d7067d-8c30-40c5-9fe8-678f18d514ff&amp;portal_id=5369947&amp;canon=https%3A%2F%2Fglobalshares.com\/academy%2Flearn%2Ffive-stock-compensation-features-not-to-miss&amp;redirect_url=APefjpEek801Rbols5QWroyy5nidy0xVWssKN07_cUwDleO6ROkubFWKWuBbDw9-BsxhoZgJilLAxkTW8ZYptm8dsE9e8rjLevLSKjNc2sZqSmSHtCwl5kaSHbgNFMi757C-c7JlfWO0yJCID_EROqfyya16DT58C-bB6bQIeemdLX767Nh4QFTL3Gp7FZpQHHHFE8BjgLF2pb7RBKjW5CtLldmCgWk_m5a0Z7LqygRpJeMhAtqfs-nVnDeNIVV-Ooj_sw_l0Y9lCVNuH122DPLHo1oY50GT_A&amp;click=d00df5c1-45ba-4893-bdf8-0a5b7b9706bd&amp;hsutk=c0f5daf1255ca49706110cb970d9e3a0&amp;signature=AAH58kGP4UGCx2Ncm-aoJto-1I6W_nNYtw&amp;utm_referrer=https%3A%2F%2Fglobalshares.com\/academy%2Flearn%3FhsCtaTracking%3D8e6db38f-fd88-4f92-aa43-8d61de056cce%7Ced371489-41e9-4f68-9655-43cd81d425f9&amp;pageId=18035614063&amp;__hstc=3094511.c0f5daf1255ca49706110cb970d9e3a0.1562151216056.1573740189357.1573742986461.187&amp;__hssc=3094511.48.1573742986461&amp;__hsfp=2259452376&amp;contentType=blog-post\" target=\"_blank\" cta_dest_link=\"https:\/\/www.jpmorganworkplacesolutions.com\/talk-to-us\/\" title=\"Request a Demo\" rel=\"noopener\">REQUEST A DEMO<\/a><\/span><\/span><\/span><\/p>\n<hr>\n<p style=\"text-align: center; font-weight: 300;\">\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; How does a company communicate equity incentive awards so their employees truly appreciate and understand the value of their equity award?&nbsp;<\/p>\n","protected":false},"author":3,"featured_media":127874,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[596,593],"tags":[554,698],"class_list":["post-127873","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-hr-ie","category-communicating-share-stock-plans-ie","tag-see-all-ie","tag-retention-ie"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/posts\/127873","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/comments?post=127873"}],"version-history":[{"count":0,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/posts\/127873\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/media\/127874"}],"wp:attachment":[{"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/media?parent=127873"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/categories?post=127873"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/ie\/wp-json\/wp\/v2\/tags?post=127873"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}