You’re ready to onboard some new employees. Congratulations! If your company is like most, part of your onboarding process may include some education about your employee equity compensation plan. After all, the plan provides your new staff with the unique opportunity to participate in your company’s long-term success—making it not only an attractive recruitment and engagement tool but also an important element of your employee retention strategy.   

However, conveying the value of equity plans during the employee onboarding process may be harder than you think. Often, employees coming onboard don’t fully understand the ins and outs of equity ownership, particularly in a private company context. Plus, equity-based compensation jargon can get confusing fast. Mention restricted stock units (RSUs) and non-qualified stock options (NSOs), and more than a few questions may rise. Start talking vesting and valuation, and eyes may get glassy. By the time you’re ready to chat about tax consequences, your newest employees may be thinking that participation in your equity plan could be more effort than it’s worth.  

And that would be a shame, not only because you’ve invested in making the plan a success, but because you may risk missing the benefits of active plan participation—from increased employee loyalty to fostering a culture of ownership.  

The good news is that there are ways to promote equity plan participation among your new hires. It just takes a couple of sound approaches when communicating equity plans and equity participation agreements.  

Starting with the “who” of the equity-based compensation plan 

Although many new hires may be unfamiliar with equity as compensation, others may have a full grasp on it, so it may make sense to offer different levels of education. Consider creating a tiered communication program, where novices receive the most detailed training and extra support and experienced equity plan participants can opt for just the highlights.  You may also consider taking steps to ensure each employee understands their equity participation agreement that may include information about vesting schedules, cliff periods and non-compete language.  

Keeping it simple to boost plan participation  

No matter how well your new employees understand equity-based compensation, no one wants to wade through complex information full of technical terms. To boost plan participation, you may consider aiming to use accessible language in your communications. By using concepts your employees understand, equity compensation can be more approachable.  

 It may be helpful to align your equity program communications with your existing corporate brand. That’s particularly true for new hires who are just becoming familiar with your visual identity. Morgan Stanley at Work assists your efforts permitting you to customize the Shareworks platform to reflect your branding. Your participant can personalize their experience by electing to view the platform  multiple currencies and languages, so your employees around the world can feel at home.

 Taking the communication multi-channel  

Learning styles differ, which is why communication across various channels may heighten the odds of reaching the most people possible. While some of your new hires will review your entire plan booklet, others may prefer shorter articles shared over your company’s intranet. Others may prefer face-to-face interactions and some learn best through reading. To reach them all, consider implementing a multi-channel strategy using emails, videos, print, text messages, events and more. Consider ways to make the education interactive, such as through online learning modules or gamification. 

  Making equity ownership engaging to learn  

Onboarding may be stressful for new hires who are typically inundated with more information than they can retain. That’s why it’s important to provide ongoing access to your educational materials through an easy-to-navigate centralized portal. A good equity plan management platform makes this possible by providing you with videos and other educational resources directly on the platform. Participants can also review their award agreements, accept grants and receive automated notifications about upcoming award-related events through the system.  

Setting participants up to succeed  

Employees who don’t fully understand their equity compensation may fear making a mistake or are hesitant to become active plan participants. To help simplify the process, the Shareworks Participant Experience features an intuitive design that allows your employees to complete a wide range of transactions. Through a single sign-on, participants can gain a clear, consolidated picture of their equity awards and savings. Its full functionality is also available through a mobile app, empowering participants to conduct portfolio forecasts, check balances, track vesting events, exercise their options and sell or transfer shares no matter where they are.   

Following up with participants about their equity compensation plans 

It may not be enough to encourage equity plan participation during onboarding and hope for the best. To make sure your people have the information they need and understand their next steps, you may consider consistently following up. A sound equity plan management platform allows you to track activity completion, so you can proactively reach out before critical dates to encourage account activation or remind employees of your annual vesting schedule.   

 Keeping the equity ownership conversation going  

The conversation about equity compensation doesn’t end after the offer letter is signed. To foster a culture of ownership across your organization, there can be benefits to offering ongoing education. This can take a variety of forms—from fireside chats, regular blog posts, and engaging video series to posters, alerts and events designed to encourage specific action.  

If you’re looking for more communication ideas, whether you’re onboarding or as part of an ongoing educational campaign, then please contact us.

Morgan Stanley at Work, Shareworks, Morgan Stanley Smith Barney LLC, and its affiliates, employees and Financial Advisors do not provide legal or tax advice. Individuals should consult with their tax/legal advisors before making any tax/legal-related investment decisions.

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