How Global Atlantic overcame the arduous task of manually executing its equity compensation plan.

When it comes to providing Americans with retirement, life and reinsurance products, Global Atlantic Financial Group recognizes that no two customers are alike. That’s why it takes great strides to provide customized options that allow its customers to fulfill their unique protection, accumulation, income, wealth transfer and end-of-life needs.

This focus on flexibility and customization extends to its employees too. So it makes sense that, when Global Atlantic sought to complement its equity compensation plan with a private stock offering for employees, it wanted a system that could adapt to its requirements – and streamline (and safeguard) an otherwise complex process.

Evolution of equity compensation

When Global Atlantic conducted its first private company stock offering for employees back in 2016, its goal was to enhance employee engagement. At the time, 100 of the company’s 400 employees already had equity in the company – thanks to their compensation packages or initial LTIP awards – and it wanted to build on that level of employee ownership by providing the full employee base with an opportunity to own a piece of the company as well.

Given the relatively small size of the 2016 stock sale, Global Atlantic decided to launch and manage the process internally – with the Human Resources team driving the initiative. In addition to developing and leading education sessions, the team members distributed documentation to all employees, reviewed the signed and scanned documents (after they were first inspected by an outside law firm) and manually entered all relevant information into Excel documents. In short: the entire ordeal was labor-intensive and time-consuming.

“We created something like 300 individual shareholder agreements and documents. We took the signature pages that people had submitted originally, combined them into PDF documents and manually emailed everything out,” recalls Jenn Cohen, Head of Compensation. “It was extremely arduous, but at the time we believed this would be the only private sale we offered.”

The automation realization

By 2018, however, Global Atlantic wanted to offer its employees another opportunity to purchase shares. By then, the company’s head count had increased from 400 to over 1,000, and Global Atlantic’s employees frequently asked for an opportunity to purchase shares.

“We again had a lot of employees who had no equity in the business – many of them joined right after our last employee stock sale and didn’t make quite enough money to receive equity as part of their bonus,” says Cohen. “The second stock sale was fuelled 100 percent by employee interest – people wanted to participate.”

But given the amount of change the company had undergone since its last private stock sale, it was clear the old manual process wasn’t going to cut it. For one, the Human Resources team was no longer in a position to take so many people offline for two or three weeks to manage the complicated process. Second, revised SEC rules allowed it to expand the maximum offering size from $5 million to $10 million. To minimize the chances of human error, and turn things around swiftly, the company decided it needed an automated solution to see it through the process.

The quest for the right solution

Finding the right automated solution proved to be no easy task. One vendor it approached offered a system that was designed for the sale of public shares – not private ones – and didn’t have the capabilities to adapt. Instead, the company offered Global Atlantic the personnel resources to execute its equity compensation plan manually, which wasn’t the solution Global Atlantic was looking for.

Then, a timely introduction to Shareworks by Morgan Stanley (then Solium) from mutual partner Morgan Stanley changed everything.  “What Solium offered, which was something we couldn’t get anywhere else, was Shareworks, a complete, customizable, flexible system – and they developed it within a week,” says Cohen. “And working with the people was an even better experience. I emailed them constantly and they did whatever was necessary to get things done. It was incredible.”

A dynamic experience

With Shareworks, the entire private share sale process essentially took place over two phases. The first involved sending out emails to all eligible employees that offered detailed information about the program and provided them with the opportunity to sign-in to the streamlined Shareworks dashboard.

“It was all very clear. With the click of a button, interested employees could input their indications and submit the necessary documentation,” Cohen says. “From our end, we could access all the signed share requests, reactivate people who lost the original email, send out reminders and customize the program. It was all really easy to do.”

The second phase occurred after the system was closed and all share requests were submitted. Once the evaluation was completed and the final purchase price was confirmed, the system was dynamic enough to adapt—allowing the company to re-input dates and times without any hassle.

“Our employees were able to download the documents for themselves and actually make payments through the system. At the end of every day, the team would simply sweep the funds into the company’s accounts,” says Cohen.

A new chapter

Cohen says she would recommend Shareworks to any company looking to manage a similar liquidity event – without hesitation.

“It was just unbelievable how dynamic and creative the team could be to help us get exactly what we needed,” Cohen says. “Thanks to Solium’s help, over 50 percent of our employees are shareholders. Which is a pretty nice thing to say.”