5 Tactics to Help Employees Make Smarter Financial Decisions

According to the Schwab Stock Plan Services 2020 Participant Study, equity awards make up a significant portion of stock plan participants’ net worth: on average, equity compensation is 32% of overall net worth for stock plan participants and company stock makes up 30% of their investment portfolio. When leveraged wisely, stock compensation has the potential to build meaningful wealth for employees, but it is crucial for employees to make smart decisions about that compensation.

In the NASPP’s May webcast, Renee Kettelle of Charles Schwab led Suzie Bentley of Nvidia and Christine Zwerling of Twilio in a discussion of how they incorporate financial wellness in their stock plan educational programs. Here are some of my favorite takeaways.

Five Tactics to Help Employees Make Smarter Decisions

After hearing about the innovative approaches that Nvidia and Twilio take on financial wellness, I’ve come up with five tips for you to consider for your own educational program:

1. Offer Access to Financial Consultants

Individualized financial advice is a key component of a financial wellness program, thus, both Nvidia and Twilio provide employees with the opportunity to meet with financial consultants. Before the pandemic, Nvidia had a consultant available onsite at their headquarters (since the pandemic, all consultations have been virtual).

Since the inception of the program in December of 2019, Nvidia has had 350 employees meet with their consultant an average of two to three times per employee. 30% of participants in the program have completed a comprehensive planning session and 41% have created a retirement/financial plan for the first time.

2. Provide Tailored Information

Twilio brings in a financial advisor, who is also a fiduciary, to conduct quarterly financial wellness workshops for Twilio’s Employee Resource Groups, which serve specific employee populations (such as employees with military backgrounds).

Christine’s team meets with the ERG heads in advance of the presentation to uncover key concerns so that the presentations can be tailored to address these topics. As a result, the presentations have been very well received by participants, achieving an impressive net promotor score of 8.9 out of 10.

3. Start with a Planning Committee

As with most equity plan projects, forming a multi-departmental committee to oversee the program can be instrumental to success. Twilio’s planning committee includes representatives from HR, investor relations, stock plan administration, and corporate communications. The committee has been helpful in defining Twilio’s needs, determining how to approach the project, and getting leadership support.

4. Don’t Be Afraid of Technical Topics

Nvidia’s stock price has doubled over the past year and employees can contribute up to 15% of pay to their ESPP (which has a 96% worldwide participation rate!). This has caused more participants than usual to have their purchases curtailed due to the $25,000 limitation.

Although her corporate communications team was skeptical of presenting such an in-the-weeds topic to employees, Suzie decided to develop a presentation to explain the $25,000 limitation and encourage employees to use Nvidia’s modeling tool that enables them to evaluate their risk of hitting this limit. The presentation successfully encouraged employees to be more self-sufficient when deciding on an appropriate contribution level and has reduced employee inquiries.

5. Create a Wellness Inventory

Nvidia has over 30 different programs that help employees with various financial needs—everything from a 401(k) plan and equity awards to student loan repayment assistance and even pet insurance. These are great benefits but this many programs can be confusing.

Suzie’s team developed a presentation that inventories all these benefits and helps employees sort through which benefits make sense for them.  This helps employees evaluate the programs and highlights the many benefits they receive through their employment with Nvidia.

Three Tricks to Get Support (and Budget) for Financial Wellness

Administrators often tell me that they struggle to get company leadership (and legal) to commit to providing financial education to employees. I asked Suzie and Christine for some suggestions on how to do this:

1. Leverage Other Departments

Suzie notes that when trying to get the go-ahead for your own financial wellness program, it can be helpful to team up with HR, since they often have a larger budget for employee education than stock plan administration. Having the multi-departmental planning committee helped Christine demonstrate to legal that they were making thoughtful and careful recommendations.

2. Answer When Opportunity Is Knocking

When she was struggling to get budget allocated to Twilio’s financial wellness program, Christine found a silver-lining in the pandemic. She emphasized to the leadership team that the pandemic was creating a lot of financial uncertainty for employees that the company could help alleviate. This was the deciding factor that got her the budget she needed.

3. Keep Everyone in the Loop

To ensure ongoing support for the program, Christine keeps everyone informed of the feedback she gets from employees. Be sure to report on program participation, as well as positive responses and areas for future improvement; provide this information to your executive team and all departments invested in the program.

The webcast, “ Help Employees to Make Smarter Equity Award Decisions,” is well worth your time—check it out today.