It starts innocently enough while a startup is eager to attract and incentivize its talent to do great things. At that point, who has time to worry about managing stock options? We’ve got real work to do. Later, it becomes a turf question. Is this a job for HR or payroll or accounting or legal? It’s a complex task but the volume doesn’t justify a full-time expert. And nobody on staff is eager to take ownership. But when an IPO is on the horizon, equity management becomes a crucial issue and getting it right means unraveling those years of benign neglect.
Solutions are available, though. This is what me and my colleague, Niki Rahimi, a consultant with Armanino’s Equity Management Solutions practice, explained during our recent webinar. The key points to remember are the rules and communication.
During the webinar, Niki and I presented multiple, short case studies to illustrate the complexities involved in equity management and explored where things can get off track. Important trouble spots worth monitoring include:
- Grants to new hires that don’t make the board minutes
- Terminated employees still on the books
- Issuing grants from expired plans or non-allowable grant types
- Merger transactions and conversions
- Grants to foreign employees
All that said, I want to leave you with a piece of wisdom from one of my clients: “You’re not going to be a hero for getting stock option reporting right, but you will get a lot of grief for getting it wrong.”
To watch the entire webinar, visit our recap page.