5 Trends in Stock Plan Administration Staffing and Practices

Next week, Joseph Rapanotti of Deloitte Consulting and I will be presenting highlights from the NASPP/Deloitte Consulting 2020 Domestic Stock Plan Design survey during the webcast “ Top Trends: Plan Administration, ESPPs, Ownership Guidelines, and Insider Trading Compliance.”

Looking for a sneak peek at the trends that will be highlighted during the webcast? In the latest episode of the NASPP’s Equity Expert podcast series, “ 5 Trends in Stock Plan Administration Staffing and Practices,” Jenn Namazi and I chat about five stock plan administration trends that we noticed in the survey.  Here are the trends we talk about.

1. HR/Comp & Benefits typically have primary responsibility for plan administration.

I often hear it said that stock plan administration doesn’t have an organizational home. But just over 70% of respondents to the 2020 survey report that primary responsibility for administration of their stock plans is housed within the human resources or compensation and benefits organizations.

That seems like a pretty large majority for something that is supposed to vary considerably from company to company. It’s consistent with past editions of the survey, going back all the way to the first survey we conducted in the early 1990s. Maybe stock plan administration does have a home after all.

2. Staffing levels are commensurate with the number of plan participants.

Not surprisingly, companies with more stock plan participants have more personnel dedicated to administering their plans. Over half (54%) of respondents with over 5,000 stock plan participants report that they have two or more personnel dedicated to plan administration. Another 25% report that they have four or more dedicated personnel.

Conversely, 86% of respondents with less than 251 plan participants report that they have just one or no dedicated personnel administering their plan. (The data I’m citing is for corporate headquarters staff only, which represents the majority of stock plan administration staff—see trend #3).

3. Teleworking arrangements have not been common for stock plan administrators.

Consistent with the 2017 survey, the overwhelming majority of respondents report that personnel dedicated to plan administration work at corporate headquarters. Only 10% of respondents report that dedicated administration staff telework. The survey was conducted just as shelter-in-place orders due to COVID-19 were going into effect; now that most stock plan administrators are working from home, it will be interesting to see if this changes in future surveys.

4. Excess tax withholding is not a common practice.

The majority of respondents (63%) do not allow employees to request additional withholding on their stock plan transactions under any circumstances. Among those respondents that allow excess tax withholding, most allow this practice only for certain individuals (16%) or on an exception basis (9%). Only 13% of respondents allow excess withholding on a widespread basis. Where companies allow excess tax withholding, the majority (73%) do not require employees to submit an updated Form W-4 to request the additional withholding.

5. Use of in-person presentations to educate employees on stock plans is declining; use of electronic mediums is increasing.

Only 55% of companies offer in-person presentations to employees, down from 70% in 2017. Use of webinars was up, with 63% of respondents offering them compared to just 38% in 2017.

Just over a quarter of respondents use videos to educate employees. Respondents using internal social media to educate employees increased to 58%, up from 47% in 2017. Use of blogs in educational programs increased to 31% of respondents, up from 20% in 2017.

Learn More

For a little more color around these trends, be sure to check out the podcast Jenn and I recorded, “ 5 Trends in Stock Plan Administration Staffing and Practices.” And for even more trends, check out this webinar, “ Top Trends: Plan Administration, ESPPs, Ownership Guidelines, and Insider Trading Compliance.”