CANADA CHAPTER

Morgan Stanley at Work's fourth annual State of the Workplace Financial Benefits Study reveals a growing demand for equity compensation among employees and HR leaders at both public and private companies. The study highlights that equity compensation is a top driver of employee engagement and retention, with 95% of HR leaders and 80% of employees recognizing its motivational impact. However, awareness and education gaps persist, as only 38% of employees are aware of these benefits, indicating significant opportunities for companies to enhance their equity compensation education programs.

In a recent webcast sponsored by InsightSoftware, the recipients of the 2024 Best in Technology GEO Award gathered to explore the crucial role of technology in reshaping share plan management. Representatives from industry leaders Domo, DHL, Amazon, and Boston Scientific shared their perspectives and introduced groundbreaking technological solutions that have transformed share plan administration both internally and externally. 

Addressing unsustainable practices 

Kody Adams from Domo shed light on the necessity for change, identifying existing practices within their share plan management as unsustainable due to their inefficiency and complexity. Manual processes for equity concept simplification and administrative tasks were proving burdensome and error-prone. Recognizing the urgency for innovation, Domo embarked on implementing an approach aimed at simplifying equity concepts for employees and automating repetitive processes. This initiative aimed to streamline operations, minimize errors, and enhance overall efficiency, ensuring a smoother experience for both employees and administrators. 

Navigating executive support 

Kody emphasized the critical importance of securing executive backing for transformative initiatives. While facing initial scepticism from some leaders, particularly regarding data privacy and security concerns, Kody's direct executive championed the initiative. Gaining consensus required extensive discussions and concessions to address concerns, highlighting the importance of aligning visions across leadership tiers. The journey to securing executive support underscored the significance of transparent communication, meticulous planning, and a clear demonstration of the anticipated benefits of the proposed technological advancements. 

Leveraging existing resources 

Despite budgetary constraints, Kody highlighted the significance of maximizing existing resources and fostering creativity in solution development. Domo strategically collaborated with its equity provider and leveraged internal expertise to tailor a solution to its specific needs. By capitalizing on existing tools and expertise, Domo effectively optimized its resources, minimizing additional financial burdens. This collaborative effort not only enabled Domo to overcome challenges but also fostered a culture of innovation and collaboration within the organization, ultimately contributing to the successful implementation of its share plan solution. 

Streamlining processes through technology 

Adam Favreau shared insights into Boston Scientific’s technological journey, emphasizing the importance of harnessing technology to simplify complex processes. Recognizing the need to streamline share plan management processes for enhanced efficiency and accuracy, Boston Scientific established API integrations between SuccessFactors and Morgan Stanley. This automation reduced manual intervention and improved accuracy in share plan management. Favreau highlighted the necessity of building a compelling business case and securing leadership buy-in to drive technological advancements, further emphasizing the pivotal role of technology in optimizing share plan administration processes. 

Embracing AI for future success 

Jenna Knowles from Amazon discussed the future trajectory of share plan management, highlighting the transformative potential of artificial intelligence (AI). Jenna underscored the role of AI-powered modules in automating processes and delivering personalized support to employees, thereby streamlining operations and enhancing the overall employee experience. Amazon's innovative approach to leveraging AI reflects its commitment to staying at the forefront of technological advancements and continuously enhancing its share plan management practices to meet the evolving needs of its workforce. 

Collaboration and innovation 

Throughout the discussion, speakers emphasized the significance of collaboration between organizations and technology providers. Bernd Schmelzer from DHL commended their partners for their instrumental support in implementing innovative solutions. By closely collaborating with providers like BEQOM and Computershare, DHL successfully integrated new technologies, optimizing the efficiency of their share plan administration processes. Bernd’s insights highlighted the invaluable role of collaboration in driving innovation and fostering successful technological implementations within organizations. 

In conclusion, the webcast participants reflected on the evolving landscape of share plan management and expressed optimism about the transformative potential of technology, particularly AI.  

While challenges persist, embracing innovation, leveraging existing resources, and fostering collaboration are pivotal in driving efficiency, accuracy, and employee satisfaction in share plan administration.  

The shared experiences and insights from the award-winning organizations serve as valuable lessons for organizations looking to optimize their share plan management practices and stay ahead in an increasingly digital and dynamic business environment. 

Read more about these winning plans here: BEST USE OF TECHNOLOGY | Global Equity Organization 

Microsoft has taken a proactive step in addressing cybersecurity concerns by linking executive compensation to the company’s security performance, following recent high-profile attacks. The initiative, known as the Secure Future Initiative (SFI), aims to prioritize security and hold leaders accountable for meeting security plans and milestones. This strategic move reflects Microsoft's commitment to enhancing cybersecurity and fostering a culture of continuous improvement, as highlighted by Executive Vice President Charlie Bell and Chief Information Security Officer Igor Tsyganskiy.

Joseph Blasi, Director of the Institute for the Study of Employee Ownership and Profit Sharing at Rutgers University, provides invaluable insights into the politics and potential of employee ownership within the contemporary economy.

Equity compensation is increasingly popular among employers as a means to attract and retain talent, with 72% of companies offering some form of it, according to a Morgan Stanley survey. Stock options, restricted stock units (RSUs), and employee stock purchase plans (ESPPs) are three common types of equity compensation, each with its own tax implications and considerations for employees. While these perks can offer potential financial rewards, there are risks involved, such as stock price fluctuations and tax complexities, prompting experts to advise careful planning and consideration of individual financial goals.

Gallup reports that 22% of Americans in 2023 fear job displacement due to AI and emerging technologies, up from 13% in 2017. Although upskilling is crucial for adapting to technological changes, low employee engagement hampers the desire to learn new skills, suggesting that expanding employee ownership could motivate workers by giving them a stake in their company's success. Amid rising income inequality and cost of living, employee ownership offers a bipartisan solution, enhancing engagement and financial security while encouraging upskilling to counteract labor market polarization.

Boeing's CEO Dave Calhoun and former Executive Vice President Stan Deal, despite announcing their departures amid scrutiny over manufacturing flaws, stand to collect a combined $45 million in compensation. They won't likely face internal clawback policies since they weren't fired due to quality management issues. However, shareholders are expected to approve a proposal tying executive compensation to safety improvements, as Boeing faces intense scrutiny following incidents like a door panel detaching from a 737 Max 9 jet. The company's compensation structure is being retooled, and leadership changes are expected to address concerns and improve performance.

Imagine getting a job offer from your dream company, but they refuse to disclose the currency of your salary—this is how the startup equity compensation market often operates. Employers offer stock options or RSUs without revealing the total number of company shares, leaving employees uncertain about their actual ownership stake. Current regulations do not require startups to provide comprehensive valuation information, leading to an overestimation of equity grants and undermining the high-tech labor market's competitiveness.