Navigating year-end requirements: pro tips for stock plan admins

0:00:00.2 Chris Dohrmann: You’re listening to Prosperity at Work from JPMorgan Workplace Solutions, a podcast all about equity compensation, financial well-being and more. I’m your host, Chris Dohrmann. Hard to believe, but we’re almost at the end of another year. And before the chaos of the holiday season begins, stock plan admins everywhere will be facing a ton of admin problems as they get their plans business in order for the financial year end. But where to begin?

Today’s guest is Georgina Lai, a consultant in equity compensation. She has a storied career running programs for Facebook, Reddit, Pinterest and others. She has just the insights you’ll need to take the pain out of year end prep. Georgina, welcome to the show.

0:00:44.5 Georgina Lai: Thanks, Chris, for having me.

0:00:46.6 Chris Dohrmann: I just wanted to let everybody else know, because we’ve known each other for a while. Can you tell the listeners a little bit about yourself? Because you have a very impressive background.

0:00:56.6 Georgina Lai: Oh, well, thank you. I have been an equity professional now for over 15 years. I’ve had the pleasure for working for some pretty large companies. I’ve worked for Salesforce and Facebook or now known as Meta and some other companies like Reddit and Instacart and Pinterest. I also took a little sideways journey into product working for Nasdaq Private Market, helping them build a cap table and secondary market product.

0:01:30.2 Chris Dohrmann: Amazing. Thank you. Let’s start at the beginning. We’re in the fourth quarter and we’re talking about what we’re going to do at the end of the year and to avoid all of the pitfalls and problems. Where do you want to start?

0:01:42.5 Georgina Lai: Well, I think we should start with data. How is your data at your company? Surely many established companies have automated feeds going in and out of their equity platform. But when was the last time you’ve checked those feeds? Have you audited those feeds? I would assume you would be auditing them on a monthly and quarterly basis, but perhaps it might be good to audit it on a six month running basis as far as maybe there have been changes from your HRS system and were they appropriately reflected in your stock system? So that’s one of the first places I would start, absolutely, to ensure that your data feeds are working as you expect them to and that any changes, backdated changes, are captured appropriately and reflected accurately in your stock administration system.

0:02:37.4 Chris Dohrmann: I think that’s a great point because you will know when your internal IT at any company is doing something or a refresh. You don’t always know when the payroll system or the HR system or something is doing a refresh that may not be compatible or may have caused the glitch.

0:02:53.5 Georgina Lai: Also, you do have people who leave the company in the middle of the year. And as you’re heading towards the end of the year, you’re thinking about, okay, well, there’s payroll reporting. Do we have the most recent address and contact information for your terminated employees? Because it will be important for their end of year tax information to be able to reach out to them and make sure that they have everything they need to file their US tax returns.

0:03:20.5 Chris Dohrmann: You have already mentioned tax and you’ve mentioned data. So you’re talking about the IT, the HR system people, payroll people, and that’s one side. But I mean, are there other audits or are there other reports or are there other things that you should start to look at now for the rest of the stakeholders?

0:03:36.6 Georgina Lai: Certainly, you know, HR and the payroll team are teams that stock administrators work very closely with. So they are my first go-to. Secondly would be the tax team. If you have incentive stock options in the US, do they have the information they need to, you know, or what is their timing for disqualifying disposition reporting and everything? It is a good time to connect with them and understand their timelines so that you can prepare yourself and your team accordingly. Also, I like to check in with the legal team. If the stock team has been responsible for filing Form 4s on behalf of the Section 16, or if it’s even your legal team or outside counsel, just a quick sync with them to make sure that they have captured all the transactions. So an audit of that information on what you filed would be a good thing to do at this point in time, just to make sure that everything is clean and good for the year to date.

0:04:35.9 Chris Dohrmann: .You bring up the point about making sure that you check with your stakeholders about their schedule because they’re going to be very, very helpful. And the fact that you’re coming in early and explaining to them that you want to make sure that they get the right information and everything can be done once, I’m sure is well received.

0:04:55.3 Georgina Lai: Absolutely. I think it shows great partnership with your stakeholders to be proactive and it just strengthens the relationship further, I think.

0:05:04.7 Chris Dohrmann: Let’s drill into the data because I think some of the biggest issues or some of the issues since the pandemic that have been coming up are all related to addresses. I maintain that the largest companies probably know where 95% of their employees live. I think there’s probably 5% that either have been in another jurisdiction or have moved and have failed to notify anybody. But what’s your experience with that?

0:05:35.4 Georgina Lai: Mobility is a tough one. And certainly with a pandemic, the lockdown where people kind of worked remotely pretty much from anywhere, and maybe they’ve stayed since then if your company is still remote. But yeah, it is such a challenge to find out where people are working from these days, especially if you have still a hybrid model or a remote model. So I do think that partnership with the HR team and even the payroll team, that’s very important for them to understand where employees are. So that for me, I think, is a more robust sort of action to take in connection with your HRAS and payroll teams. And it might be something that you can schedule on a yearly basis just to send out polls to understand where people are. The other thing is I think it would be really helpful to have a meeting with people managers to ensure that managers understand where their direct reports are working from, because surely they can be helpful in helping you find out where your employee base is working from, because you could be tripping up some tax issues if you’re not aware actually where your employees are working.

0:06:53.7 Chris Dohrmann: Now that we’ve talked a little bit about, and you raised mobility, I wanted to talk about international participants. And they bring in some unique challenges there. So when you’re doing year-end and you have to deal with multiple countries, what’s your biggest challenge in that respect?

0:07:11.7 Georgina Lai: Often it’s for our non-US employees, for the international employees, I think a large challenge, certain countries may have not issues per se, but addresses are different in the way the US records addresses. So sometimes it’s addresses that say, oh, you know, three blocks down from the water tower or something. So having to check in on that is very helpful just to ensure that your records are accurate because from a US perspective, I often go, is that the official address? So following up with your HRIS team or the employee directly would be very helpful. The other thing I’ve noticed for non-US employees, they often put down the company address as their home address, or they have their mail delivered to their address or to their family’s home or whatnot. And sometimes that might cause issues, especially if they’re newer employees and their new hire employees might cause trouble with opening up brokerage accounts for their equity compensation piece. So this might be a good time of year just to kind of spot check it and look at some of these addresses that, oh, that’s the company address in our office in China or in Singapore.

0:08:37.5 Georgina Lai: So just double checking those addresses I think is very helpful. It is a challenge, I will say, because often employees go, well, I have my mail routed to my parents’ address or to the office address. But explaining that, oh, well, you will need to open up a brokerage at some point so we can deliver your equity compensation. We need it to match your government ID or something to that effect in order to drive home the importance of having clean, accurate records. So that’s always a little bit of a back and forth. I feel that you should allow yourself some time for that back and forth to really get down to cleaning up your data for employees.

0:09:22.9 Chris Dohrmann: Yeah, I feel your pain there. You had also mentioned when you were giving everybody your background that you worked for large public and private. So we’ve talked a little bit about publics and multinationals and some of the challenges they have because of their size. What are the challenges for a private company that may be pre-IPO?

0:09:43.3 Georgina Lai: Well, my experience has been that private companies are scrappy and they’re doing a lot of work with less resources, less human capital, for example. Often I’m a department of one at a pre-IPO company. So there are challenges there because sometimes you have so much on your plate that so many important tasks become backburner projects. So in my experience, I’ve noticed that things can be a little more loosey-goosey regarding, say, addresses. That’s a huge pain point, right? Again, the same thing you experience at a public company where it might be just a few here and there is often the case where the majority of your employees don’t have their own addresses listed in your system of record. They use the company address. So I do believe a stitch in time saves nine. And so if you can get ahead of that and have a project to update those records, it will save you when you’re heading down the IPO path in rushing and trying to find these people’s addresses so that they can have brokerage accounts and whatnot. So at a private company, I always like to act as though I’m a public company when I’m at a private company.

0:11:05.3 Georgina Lai: So ensuring rigor in compliance, even though you’re not necessarily beholden to all of the compliance out there for public companies, but just really focusing on acting as though you were a public company. So along with that is ensuring data integrity. And that is the biggest challenge I feel at private companies, because not only does the equity professional have to deal with the employee base, but they’re also oftentimes, in many ways, the transfer agent. And so they are responsible for the company cap table. And oftentimes your investors, you might not have addresses for them either, contact information. So that’s always a good project to try to get ahead of to make sure that you have contact information for all of your shareholders.

0:12:01.9 Chris Dohrmann: You know, it’s funny, people that are digital natives, so people that grew up with an iPhone and email and texting and messaging, I think sometimes lose touch with the fact that addresses are sometimes used for other things. So whether it’s validation for an address change, you may want to send it to the old address to make sure that the address was done properly. So the fact that you’re bringing it up and making sure people realize that there’s a valid reason to have the proper address there, I think is a good idea.

0:12:31.0 Georgina Lai: To your point, Chris, being digital native, you’ve got to make sure that you have their personal email address. And that’s, you know, usually it’s their official email address for, you know, work, personal as far as like interviewing and whatnot. So I think a really good strategy to have when people leave the company, especially when you’re private, is remind them, hey, can you confirm this is the right email address we have on file for you? Because, you know, periodically we will reach out because if you’re a private company that issues, say, RSUs that have this, you know, life beyond you working at the company and can be delivered to you at a future date and time, it’s really important to understand your contact information. So key would be their email address and emphasizing to the exiting the employee that please, you know, check your email every so often for emails from the HRS team or the stock team, because we will need to reach out to you when the company is ready to go public in order for you to get the shares owed to you from your private company RSUs. So it’s always a rush to try to find these people who have been off your payroll system for three or four years, and the only team that has the need to reach out to these former employees is the equity team.

0:13:58.5 Chris Dohrmann: I wanted to talk about regulation next. So I don’t think this is a year where we have to worry about big regulatory changes, though the SEC has talked about disclosure changes in financial reporting, and there are more and more states coming on board with some type of inclusion of equity into their pay transparency rules. So maybe that’s something that you have to think about in 2026. But as far as regulation, it’s not just U.S. You may have some new regulation, multinational, that you have to take care of, and it’s usually something that comes up at the end of the year. Is that a challenge for you?

0:14:35.3 Georgina Lai: Yes. And something to, as a reminder for the listeners, is that not all countries abide by the calendar year and reporting requirements, right? So sometimes their tax year is not calendar year. So understanding where your employee population and your obligations for filing for regulatory purposes, having a calendar of those due dates is really very important so that you can work towards it. I usually have like the filing deadline for the particular country and then reminders leading up just to give yourself ticklers to remind yourself, hey, don’t forget, you have to gather this information for reporting requirements. Now, usually I partner with perhaps an outside accounting firm to help with those filings or an external law firm. So it’s important to work with them as well as your internal legal team because they also may be helping in that respect. And also looping in your accounting team because oftentimes there’s information from them that needs to be gathered for the disclosure. So just reminding them, being a little project manager in a sense with your cross-functional teams to remind them, hey, this is coming up. I also like to have little meetings with the teams to just say, hey, don’t forget in three months time we have this filing coming up just to make sure everybody’s on the same page.

0:16:01.9 Georgina Lai: And with that, I also really emphasize continuing education for equity professionals that going to, say, a GEO conference or an NASPP, a local CEPI sort of conference because oftentimes that’s where you get a lot of this information from and you can consult with your peers in the industry to kind of see how they’re preparing for it and gives you ideas. So really, I feel like when regulatory change is happening, it’s really important to have that community around you to kind of assess what big an impact, if any impact it will have on your operational and so that you can bring that back and share with your internal teams. So shout out to those organizations.

0:16:50.7 Chris Dohrmann: Yeah, you get to test your ideas with other people and see what they’ve done for the same challenges. And I just want to list just for the listeners that don’t know, GEO is Global Equity Organization, NASPP is the National Association for Stock Plan Professionals, and CEPI is the Certified Equity Professionals Institute at Santa Clara University.

0:17:11.0 Georgina Lai: Yep, all great resources of information and I’m a member of all three, so it’s been very helpful over the course of my career.

0:17:21.2 Chris Dohrmann: Great. And I’m sure that’s a place where you would be able to socialize or to bring up checklists. So year-end checklists that basically are the same type of ticklers that you talked about in other situations that you know that you’ve done each thing in order and you’ve talked to each team in order. So I mean, is a checklist something that you rely on other than the tickler files?

0:19:21.4 Georgina Lai: I love a good checklist. I’m a big checklist person. I definitely develop a bunch of checklists and when I go to a different role or a different company, those checklists come with me and then I modify the checklist for that company because it’s not a one-size-fits-all, right? But oftentimes, the checklists are so important because you have a document there so that your team can follow, that your business partners, they know what to expect as far as timing because on my checklist, I have timing. So for example, at month end, I will say to all my business partners, primarily accounting at this month end, is that day one of month end, you’re not going to get anything from me. That’s the day that I am auditing all the data to ensure for accuracy before I start running reports. And that gives me a day to correct anything that may be incorrect. And then assuming that all goes well, day two is when I start running, say, the reports for the accounting team. Day three is when I run reports for the tax team. So they know when to expect information from the equity Team and then they can go about doing the other work that they have to do for the month end close or the quarter end close. So yes, the checklists are great. It’s a living document and I do go into detail. Sometimes it’s by 3:00 PM. By end of day, you will receive this. And it’s very important for me and my team to adhere to those timelines so that the accounting team always knows what to expect from the equity team. And so things just run a lot smoother that way.

0:19:30.1 Chris Dohrmann: So we’ve talked about the outside stakeholders, you know, so each one of the teams that you have to work with to get a successful year end done. Is there anything that you do to look back on the plan or plan design or, you know, anything like that to say, if we did this or if we changed this part of the plan? I don’t know, FMV, vesting dates, anything to make sure that they’re not conflicting with your end process? Or is that something that you try and do at a different time of the year?

0:20:03.2 Georgina Lai: Well, it’s always good to kind of review what’s gone well over the year and what hasn’t worked out. The tricky thing about equity is once you’ve kind of built things into the plan, they kind of stay there for the life of the plan. I remember we had say RSUs when we first started granting RSUs at a private, well, we were a private company at one of my prior employers. The RSUs vested on the first of the month, which doesn’t work out well when you’re trying to do month end, quarter end sort of closed, right? So we had, I think, a year or two of those RSUs that vested on the first of the month that we had to live with until they basically fully vested. So those are kind of tricky unless you’re willing to, the company and the accounting team are willing to modify that. You might be able to look at some deferral provisions within your plan that might be able to defer the vesting until maybe the middle of the month so that you don’t have to bump into the month end process. But with that though, you have to balance the optics for the employee.

0:21:19.1 Georgina Lai: Are they feeling, well, now I get a worse stock price because stock prices are always lower in the middle of the month. Whatever excuse they’re going to make for not wanting to change that. So there’s a lot to think about there, but it’s also good to kind of say, okay, that didn’t work for us. Moving forward, let’s work with a comp team. Let’s work to figure out what would be a better system in order to streamline the operational aspect of equity administration. So it’s always good to kind of take stock of what has been working, what hasn’t been working, and it might be the time to socialize the thought of maybe tweaking your program a bit. Maybe the chosen purchase date of your ESPP could use moving a day or two out or, you know, backwards. So maybe that’s time to kind of go, hey, this has been the issue. We’ve been noticing now that we have this new ESPP program, the purchase date kind of doesn’t align with XYZ. It might be time to kind of socialize that and work on a strategy to maybe tweak the program a little bit or, you know, vesting dates and whatnot. Because again, sometimes blackout overlaps with some of these dates and that’s not a great experience for the employee.

0:22:37.7 Chris Dohrmann: And I think sometimes the plans are either carried over from other templates or things like that. So it may not be completely compatible with your plan. So I think raising the issue is a good idea.

0:22:49.9 Georgina Lai: Absolutely. Or if your company has been active in M&A, what if you kind of inherited this other company’s stock plan that didn’t change vesting or whatnot? So again, it might be a good time to kind of look at it. And again, I always like to do postmortems on big events, either vesting events or maybe ESPP purchase or offering periods, taking notes throughout the year, what’s working, what isn’t working, what you can tweak during the year and what needs a little bit more of a plan level tweak. Take note of that and say, well, here’s the workaround. Here’s what this workaround costs. And then quantify what it would mean to perhaps tweak the plan itself or defer the delivery date of the RSU vesting. So trying to quantify that so that the teams can come together and make an informed decision on whether or not to change the program a little bit or keep it as is and just do the workaround.

0:23:52.9 Chris Dohrmann: I wanted to bring up probably the largest plans most companies have is their employees start purchase plans. Are there any specific events that you should be looking at as far as the ESPP with enrollments might be possible, purchase dates or anything, especially a purchase date that might be done at the end of the year on New Year’s Eve? All of those pose some really unique problems. Have you found that or ways around that?

0:24:21.3 Georgina Lai: Well, that’s it. Ways around that. That is when I… That’s a great question because, yes, when sometimes you inherit a plan where the purchase is on the 31st of December and the following day is a market close day. And some companies do a sell to cover for their non-US employees. So it’s a challenge to administer those kinds of plans. So yes, those are the plans that you kind of want to look at the pros and cons. Sometimes, unfortunately for us equity professionals, it’s very much a, we’re going to just have to live with this because they don’t want to change it. So what are your workarounds? What can you document? What can you streamline and work with your brokerage, your internal teams, the accounting teams, the payroll teams, because it all affects them, right? With purchase dates that aren’t necessarily ideal. But from the employee perspective, I always think it’s good to perhaps pull them. Every year I feel the HR team pulls them on the benefits and whatnot. Make sure to include the equity programs in there, your ESPP programs, see what is working for the employees and what doesn’t.

0:25:45.1 Georgina Lai: Because oftentimes the employee’s voice speaks the loudest and might be the impetus for you to be able to improve your program because the employees don’t like having a purchase at the end of the year, for example, because it complicates XYZ for them. So definitely pull your employees. But the other thing I like to do to kind of draw attention to the equity programs, because especially out here in Silicon Valley, equity compensation is such a large part of people’s compensation, is to partner with the HR and benefits team to basically have a booth, a presence of the equity team there along with all of the other benefits providers so that you might be able to socialize your ESPP for some of your newer employees who might not know what an ESPP program is, so that they have pamphlets, have education, tell them the equity team has office hours that you can just step in and ask them any questions, things like that to make sure that they understand that their equity compensation is a large benefit to them as well. It’s a great opportunity for creating wealth, especially if you have a really robust ESPP program.

0:27:02.5 Georgina Lai: So truly leverage the attention to the benefits week, an open enrollment week that HR does, and piggyback off of that to provide additional equity program information and education. But with that as well, especially when you have an ESPP program, don’t forget to make available recordings about the program or potentially lunch and learns ahead of an offering period. Again, to make sure that employees are aware of this benefit and that they have to take action in order to participate.

0:27:38.4 Chris Dohrmann: Great. And so just to recap, because you’ve been extremely insightful in this conversation, we talked a little bit about data integrity and audits. Then we talked a little bit about checklists. Then we talked about team building and basically making sure that you’re working with the other teams. And then lastly, what worked well and what didn’t work well? Was there anything I left out?

0:28:00.4 Georgina Lai: No. Well, no, but I don’t think I emphasize where the postmortem is also helpful is your business partners, your internal business partners, right? Also checking with them. Is my checklist working out well for you? Is delivering reports to you on day three of close appropriate? Do we need to move that up? Or I’m overwhelmed right now with all the things that I have to do for month end. Can I move it on day four? So again, also checking in with your business partners where you are the source of data for them, or you are a potential roadblock for them to getting their work done. Also check in with them. What’s working with the system you have now and what isn’t? I think helps them as well, because I’ve worked with some teams where certainly they won’t necessarily speak up. They’re just like, oh, this is just how I get things, right? I once worked with an accounting manager who just accepted, this is just the report I get. And then I have to do pivot tables and I have to do this, that, and the other. And I looked at him and I said, you know, I can build you a custom report that has all this information.

0:29:10.7 Georgina Lai: Why don’t we iterate on a report that works for you? So you don’t have to do these pivot tables or VLOOKUPs to get the information you need. It could just be all inclusive on this one custom report that I’ll know to run for you every month end. And he was just like, I didn’t know to even ask that. So again, you can provide so much value to your business partners if you just talk to them and ask them, you know, in an ideal world, what would work better for you? And so then you can show your value by helping them find solutions to smaller pain points for them, but surely pain points that would, you know, take up some of their time. And it also allows you to work with your service providers closely to go, hey, we need an enhancement to this report. We need a tweak to, you know, this output or what have you. So again, working through a lot of these issues helps make your team valuable and helpful, but it also can help out your service providers be better service providers.

0:30:17.9 Chris Dohrmann: Excellent point. That’s the way we’ve always done it is the enemy of progress and innovation. And by instituting communication, you’re basically dropping down the walls that are put up when somebody says, that’s the way we’ve always done it. I just want to say, Georgina, thank you very much for joining me. Your energy was electric and your expertise is always appreciated. Thank you.

0:30:40.4 Georgina Lai: Thank you, Chris. Anytime.

0:30:42.8 Chris Dohrmann: And that brings us to the end of the episode for Prosperity at Work from J.P. Morgan Workplace Solutions. Thanks for listening. If you’ve enjoyed this episode, we hope you’ll review, rate, and subscribe to J.P. Morgan Workplace Solutions Prosperity at Work podcast, available wherever you get your podcasts. You can find more insights on equity compensation, financial wellness, and more by following us on LinkedIn or over at globalshares.com. The Prosperity at Work podcast is produced by duspod.io for J.P. Morgan Workplace Solutions. Until next time, that’s Prosperity at Work. Bye.