Skip to main content

How Do You Make Your Share Plans Cost-Effective?

The benefits for employers of offering employee share plans can be far-reaching. Whether you want to motivate your people, align their interests with shareholders or recruit and retain talent, share plans can help.

Of course, as with most things that make a genuine difference, there’s a cost to it. After the initial outlay of setting up the plan and getting it approved, you have the ongoing administration and the cost of shares (with any discount offered) to think about. Overall, this can be a tidy sum, so it’s important to make sure you find ways to streamline your processes to make them more cost-effective.

Some elements may seem to be an unnecessary cost, but if ignored, these can lead to objectives being missed and reduce the overall return on investment.

So, how can you make your employee share plans more cost-effective?


1) Streamline your processes to save internal expenditure

You can manage your share plans in-house using spreadsheets. The issue with this is, if the number of employees participating increases, regular changes such as leavers and location changes occur and the number of queries rise. The more work needed, the higher the internal cost associated with the resource and processing time. At this point, you may decide to implement a modern share plan platform to reduce the admin burden, increase efficiency and improve the user experience and participant engagement. This brings the following solutions to help you save time and reduce the risk of errors – both of which can be costly:

●      HRIS/Payroll integration with automated data feeds

●      Automatic management of share award or participation limits by the share plan administrator

●      Configurable and scheduled reporting, including IFRS2/US GAAP accruals

●      Integrated tax deductions in transaction calculations, with automated remittance

●      Effective employee support tools and service (participants self-serving or contacting the administrator’s call centre support team)

●      Flexible share plan design options such as handling fractional shares and dividend reinvestment

●      Simplified leaver rules that automatically apply when a leaver date and reason is added


2) Put the power in the hands of the participants

By taking advantage of a share plan administration software, participants are empowered to understand the value of their share plan awards and manage their portfolio without requiring help from the internal share plan team. This gives participants a far better overall experience and allows them to benefit from:

●      Anytime access. Use a dedicated web browser or mobile app to increase user experience, engagement, understanding and appreciation

●      Single sign-on. Make it effortless to login

●      Online, paperless account management. Effectively control share award acceptance, placing pre-elections or exercise requests, through to self-certifications such as MiFID, W9/W8 forms, CRS etc.

●      Real-time trading. Employees can model their holdings, calculate estimated net proceeds and place trade requests, in real time

●      Accurate reporting. Customisable participant reports that can be run at any time

●      Electronic domestic and international payments. This including f/x conversion capabilities

●      A Global Nominee. Allow employees to hold shares without the need for opening individual brokerage accounts

●      Live chat. Use an additional support channel to cut down email traffic

By streamlining and automating share plan administration, you’ll reduce time and resources, freeing you up to focus on the valuable strategic aspects of your day-to-day role. In turn, this is likely to reduce overall costs, allowing you to effortlessly produce any ad hoc reports and fulfil your disclosure obligations. It will also make the employee experience far stronger, helping them to understand the true value of their share awards and allowing them to independently and confidently navigate their portfolio. Last but not least, enhanced user experience is likely to result in greater employee participation and therefore maximise the return on your share plan investment.

If you’d like to know more about how our share plan administration solution can make it easy for you to introduce efficiencies, or would prefer to schedule in a demo to see these efficiencies and automation in action, please get in touch.

Information made available by Shareworks by Morgan Stanley is for informational purposes only and does not constitute legal or tax advice. You should always consult with and rely on your own legal and/or tax advisor(s) as Shareworks does not provide legal or tax advice and the information is not tailored to the specific situations of your company or your employees. The information may not be current and is subject to change without notice. Shareworks makes no representations or warranties concerning the completeness or timeliness of the information for your purposes.

Solium Capital UK Limited (a wholly owned subsidiary of Morgan Stanley Delaware) is authorised and regulated by the Financial Conduct Authority.