In February I met one of my long-term consulting clients in person and I adore her. Holly is a huge baseball fan – she even goes to Spring Training every year – and I just realized that’s where these baseball analogies in the last few blogs are coming from. Thanks, Holly.

Really, though, that’s what it should be like when you work with consultants. They become part of your team. And when it comes to administering an equity compensation program, it’s especially important that your new team member(s) have very specific qualifications.

As a Super Admin, you’re already playing in the big leagues – you make sure that all the essential functions of your company are running smoothly, you make sure that you know who all the key players are and where to find the key resources. And your insight is viewed as valuable by executive decision-makers. So what kind of qualifications should you look for when your company finally realizes that your plate is already overfull and you convince them that the stock and option plan requires specialized expertise to be properly administered?

There are several ways to manage a stock plan:

• Assign someone or hire someone in-house to administer the plan
• Have outside corporate counsel administer the plan
• Have your accountant administer the plan
• Hire an equity compensation consultant to administer the plan

You’ll remember from past Admin Super Powers! blogs that there are four core disciplines essential to managing your company’s equity compensation program – accounting, taxation, corporate and securities law, and administration. In fact every equity compensation professional comes from a career path in one of these areas. And that’s just the problem – the accounting professional will only be looking at the accounting implications, the legal professional will be focused on the legal issues, and so on. But what we’ve been exploring for these last 8 months demonstrates that these disciplines are tightly interconnected. And in the same way that making sure the administration technology is always up to date, it’s vital to make sure your administrator is always up to date, too.

“The top experts in the world are ardent students. The day you stop learning, you’re definitely not an expert.”    ~Brendon Burchard

Who in the world can know all of the regulations and laws and requirements in all these areas? Well, no one person really. But don’t worry! Since 1989, the folks at the Certified Equity Professional Institute have been making sure that major league players in the equity compensation industry have in-depth expertise in all the core disciplines, stay up to date on new industry developments, know what questions to ask when an issue outside their core expertise arises, and can build strong professional networks – so that the legal folks have accountants to ask about esoteric accounting issues, the accountants know who to ask about securities laws, and they both know who to ask when the tax monster raises its head.

Whether your company decides to hire someone to manage your plan in-house or has an outside service provider do the administration will depend upon your company’s size, the size and complexity of the equity compensation plan, and don’t forget the budget! To get the level of expertise required to do the right job, smaller companies often find it more economical to call in a pinch-hitter. The first question you’ll want to ask when interviewing potential administrators is “Are you, or are your consultants, Certified Equity Professionals?”

Other important questions will include all of the “who does what” mechanics of the administration. The “Private Company Equity Compensation Administration Toolkit” published by the National Center for Employee Ownership has a digital co-sourcing and outsourcing checklist that is a comprehensive worksheet to help you decide what activities should be the responsibility of which team member, along with examples of transaction processes that show who should be doing what at each step.

Next month we’ll talk about how to communicate with your employees about their equity compensation awards in Admin Super Powers.

Thanks for reading my Admin Super Powers blog series on stock and option plan administration. I’m coming to IAAP Summit 2016 in Hollywood, FL this July. It would be great to meet all of you! 

My company would like to know the equity plan administration needs and wants of conference participants. Please complete this 3-question survey to help me get a general idea. Your answers are very much appreciated. See you at the Learning Table sessions at IAAP Summit!

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Achaessa James has worked in equity compensation since 1999 in the legal, venture capital, and equity administration outsourcing fields. She is a senior Equity Compensation Consultant with Stock & Option Solutions where she supports clients with system implementations, data migrations, corporate governance audits, corporate transaction preparation, and special project design and implementation.   She is also the consulting Equity Compensation Product Manager for the National Center for Employee Ownership where she manages the highly regarded twice-yearly CEP Exam Prep Course, and serves as the NCEO’s subject matter expert on equity compensation.

Achaessa’s focus on privately held companies has earned her a deep expertise in pre-IPO and M&A equity planning and audits, and best practices in administration and technology. She speaks on these topics at industry conferences and in webcasts, and is a published author with books including “If I’d Only Known That!”, and “The Private Company Equity Compensation Administration Toolkit” as well as many newsletter articles in industry publications. You can connect with Achaessa on LinkedIn.