7 Ways to Educate New Hires about Employee Equity Compensation

July 6, 2020 Shareworks Marketing

You’re ready to onboard some new employees. Congratulations! If your company is like most, part of your onboarding process probably includes 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 not only an attractive recruitment and engagement tool but also a critical element of your employee retention strategies

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 are bound to 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 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. 

Start 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 likely makes 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.  It is important to take steps in efforts to ensure each employee understands their equity participation agreement that may include information about vesting schedules, cliff periods and non-compete language.

Keep 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, aim 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. Shareworks assists your efforts permitting you to customize the platform to reflect your brand images and voice. You can even communicate in multiple currencies and languages, so your employees around the world can feel at home. Check out Shareworks Global Intelligence for more information on our database of legal and international tax regulations that spans more than 170 countries.

Take the communication multi-channel 

Learning styles differ, which is why communication across various channels heightens 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.  

Make 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. 

Set 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, including trades, without any previous trading experience. 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.  

Plus, if your participants have any questions about account activation or system navigation, or need help with trading or completing tax forms, Shareworks Support Center is available around the clock to offer assistance. We also offer the Shareworks Academy for participants to go through self-directed learning with industry context and Shareworks how-to’s.

Follow up with participants about their equity compensation plans

It’s not 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 should consistently follow 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.  

Keep 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, it’s important to offer 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.

Previous Article
How to Navigate Equity Compensation Growing Pains
How to Navigate Equity Compensation Growing Pains

Discover what equity compensation is and how your company can navigate equity compensation plans over growth.

Next Article
Preparing for an Upcoming Audit? Four Things to Consider
Preparing for an Upcoming Audit? Four Things to Consider

Discover four things you should be considering when preparing for an upcoming financial audit.

Cap Table Management

Issue stock and manage all your equity in one place without spreadsheets.

Learn More
© 2021 Solium Capital ULC and its affiliates (“Shareworks”). All rights reserved. Shareworks, Shareworks Global Intelligence and all product marks and logos are trademarks of Shareworks. THIS INFORMATION 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 is sourced from third parties, may not be current and is subject to change without notice. Shareworks makes no representations or warranties concerning the accuracy, completeness or timeliness of the information and is not implying an affiliation, sponsorship or endorsement with/of any third parties or views expressed by such parties. Any views expressed in the information are solely those of the third-party source. Shareworks shall have no liability arising out of, or in connection with, the information, including any loss caused by use of, or reliance on, the information. All information made available by Shareworks is subject to the terms of the written agreement entered into between Shareworks and your company. Shareworks by Morgan Stanley services are provided by Morgan Stanley Smith Barney LLC, member SIPC, and its affiliates, all wholly owned subsidiaries of Morgan Stanley. CRC 3684903 (09/21)