In the lead up to a vesting, many companies find themselves trying to strike a balance between managing employee expectations, maintaining regulatory compliance, and addressing financial implications – and it can feel daunting.
As the experts in employee share plan management, Computershare can support you throughout the entire plan lifecycle. Below are some key points to help you set company up for a successful vesting.
Decide the source of your shares
Have you determined how you will source your shares (if required) in preparation for your upcoming vesting? Will you purchase shares, issue new shares, or use an existing trust arrangement? It's important to consider this ahead of time and speak with us to help facilitate whichever option is most appropriate for you.
Establish your vesting population
Leading into vesting season it is imperative that you review and finalise your vesting population. This list is the ‘source of truth' for your entire vesting process and ensuring it is finalised and accurate ahead of time is a crucial step in setting your company up for success. This includes but is not limited to, ensuring that the correct participants are included in the list, and all their personal details are complete and up-to-date.
Determine participant tax treatment
Once your vesting population is finalised it's time to confirm participant tax treatment. Computershare will work alongside you to assign the correct tax treatment for your participants. Depending on where your employees are located, their tax treatments may differ considerably. If employees require ‘sell to cover' or ‘withholding tax to cover' this may differ depending upon where they are domiciled.
Communicate with employees about tax requirements
It's important to communicate with your employees in a clear and timely manner when it comes to vesting. Whether it's regarding W8/W9 or FATCA requirements, or to confirm personal and financial details, clear and simple communication is key to ensuring a seamless participant experience.
Many of our clients use their own internal communication channels to distribute important information, or Computershare can send communication your behalf to employees, confirming all their personal and financial details are up to date to ensure a great individual experience.
These are some of the key steps required in the journey to a successful vesting, and we are here to help. A successful vesting requires proactive planning, diligent administration, and a commitment to transparency.