Product Articles

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A series of occasional articles relevant to Sixti's offering

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1. Is it time to refresh your share plan administration?

 

It is commonplace for companies to have a range of share plan solutions – often across several providers. This is often the result of “new” plans being introduced and offered to a new provider, thereby encouraging existing providers to improve their service offering. It may also be the case that discretionary plans are outsourced to a “specialist provider”, rather than the existing provider.

 

The offerings of all providers are constantly under scrutiny, and service quality is a common discussion point for the secretariat or HR teams. Occasional errors will occur in any organisation, however share plan providers all aim to offer high quality product offerings. Most now offer a full range of share plan products, encompassing all plan types.

 

Whilst there have been a number of IPO’s in recent years, movement of share plans between providers is fairly rare, due in part to its apparent complexity.

 

Your organisation may have different SAYE/Sharesave and SIP providers, and maintain your discretionary plans in-house, or with a second or third provider. This is very common, however the end result is a complex and challenging route for your employees wishing to exercise an option, retain or sell their shares. It is not uncommon for two or three websites, or communication methods (eg email) to be necessary to carry out even basic transactions. A high-level overview of the employees combined interest in the employing company is virtually impossible!

 

This is the year to look critically at your offering to employees. Why not look for a single supplier for everything? It is now far simpler than ever before!

 

Historically, SAYE was the challenge, as you cannot move the savings carrier, resulting in a long lead out from the existing SAYE provider.

 

Retained shares can also be a challenge, as these are held by the registrar – on a different system.

 

Fortunately, some providers are now prepared to offer an administration and exercise function for legacy SAYE. Savings remain with the legacy savings carrier, however the old and new providers can liaise and provide a single contact point for both your employees and the secretariat/payroll/HR functions.

 

In addition, nominee accounts can be implemented, resulting in every share plan and retained shares being visible through a single web portal – often with your corporate branding.

 

The benefits are obvious – simplicity for employees and the corporate. Items such as board minutes and RNS announcements will also be simplified. In the medium-term, costs should also reduce.

 

The only obvious issues are around accuracy of data, however as your HR/payroll function will only have to provide one set of files, and detailed agreements will outline responsibilities very carefully, all should work fine.

 

Mark Riches of Sixti Limited has many years of experience in employee share plans. If you wish to confidentially discuss the possibility of rationalising your corporate share plans into a more manageable form, please call Mark on +44 (0) 7913 978 624 or email contact@sixti.net

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2. Documentation is critical for share plans

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Following on from my previous article (http://www.sixti.net/articles) regarding the current service offerings from employee share plan providers, it seems worth looking at employee share plan documentation – either as “the next stage” following the change of provider, or for most companies, a process that should be followed every two or three years, even if the provider doesn’t change.

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The actual process will be broadly similar for both situations – the only material differences will be around contact details, new functionality, and possibly slightly different terminology if a new provider is selected.

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The first stage is to look at the basics:

• Identify the date of your last documentation revisions & who drafted them?

• Has your corporate logo or colour scheme recently been refreshed?

• Are documents printed, or available as viewable or downloadable PDF’s?

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Then look at the details of each document:

• If your share plan provider drafted the documents, it is quite possible that documents used for another client have simply been adjusted for ease.

• Read through the documents – do they encompass every element of your share plans? Share plans can be fairly generic, however even SAYE varies (the “Three Year Rule” is a commonly misunderstood variant).

• The aim of the documents should be to clearly outline the main features and benefits of the relevant plan to the employee to assist them in ensuring that participation in the plan is appropriate to their personal circumstances – is this covered off?

• Do the documents cover all plans, and do they share a similar “look and feel”? It is common for “All Employee” plans to have documents, however discretionary plans are often serviced by simple Ms Word documents.

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Decide upon your aims:

• How many documents do you need?

• Can the issue of documents be phased?

• Is there a need for the documents to be dated – removing this restriction reduces costs?

• Can PDF documents be used – no printing costs, and easy to change in the future?

• Do you have time to draft the documents?

• Engage with a designer that can produce a suite of documents that work together.

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The final stage is to actually draft the documents, and this is often where the good intentions may hit a hurdle. The main input to share plans is generally the Company Secretariat, or the HR team – both of these teams are often run at minimum staff levels and are constantly busy. Additional projects may seem to be a good idea, however without experienced resource, the documentation refresh may fail.

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Mark Riches of Sixti Limited (T: +44(0) 7913 978 624; or e: mark.riches@sixti.ltd) can assist you in drafting the documents. An excellent designer that I have worked with is Chrissie Davis (T: 01462 475 183; or e: chrissie@eximiadesign.com). Chrissie is ICSA qualified and can produce a top quality, attractive design.

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Naturally, this is very much a high-level outline, and there are other necessary steps. Please contact Mark Riches to discuss further.

www.sixti.net   www.eximiadesign.com

 

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