Continuing Education Credit for Stock Plan Advisors

Need continuing education credits? In its Learning Center, offers continuing professional education for a few different certifications:

  • Certified Financial Planners (CFP)
  • Certified Private Wealth Advisors (CPWA)
  • Certified Investment Management Analysts (CIMA)
  • Certified Equity Professionals (CEP)

In total, the Learning Center offers:

  • 15 continuing education credits for CFPs (50% of the total requirement)
  • 15 continuing education credits for CPWAs and CIMAs (37.5% of the total requirement)
  • 30 continuing education credits for CEPs (100% of the total requirement)

The programs consist of six separate online self-study courses and exams:

Each course features podcasts, articles, FAQs, and videos from They are woven into an interactive learning tool. The answer key for each exam also links to relevant content on the site for further reading.

The publisher of also offers CE credits at its other website,, an online resource of educational content on nonqualified deferred compensation (NQDC). Each program in that website’s Learning Center has a comprehensive course of educational content and a 30-question exam. In total, the programs at offer:

  • 6 CE credits for CFPs
  • 6 Professional Achievement in Continuing Education (PACE) credit hours for Chartered Life Underwriters and for Chartered Financial Consultants
  • 12 Continuing Professional Education (CPE) hours for credentialed members of The American Society of Pension Professionals & Actuaries

Questions? You can reach the team at (located in Boston) at or 617-734-1979.


Legislative Update: Empowering Employees Through Stock Ownership Act Resurfaces In The Senate

This blog post is provided by, a leading source of educational content on all types of stock compensation.

While stock options continue to be popular at startups and other pre-IPO companies, employees cannot sell stock at exercise to pay the exercise price and the taxes on the income. Moreover, under current law those taxes cannot be delayed. Last year, an encouraging legislative proposal was introduced in the House of Representatives to address this issue. Approved by a House vote in September 2016, the Empowering Employees Through Stock Ownership Act (HR 5719) sought to give employees in pre-IPO companies extra time to pay federal income taxes on the spread at exercise with nonqualified stock options and on the income at vesting with restricted stock units. (See the myStockOptions blog commentaries in July 2016 and October 2016.)

Under the proposal, the permitted deferral of taxation would be considerable. The legislation would allow an employee to defer taxes for up to seven years as long as the company's equity awards met certain conditions (for example, "Qualified Equity Grants" would need to be made to at least 80% of employees). In the feedback we at receive from stock plan participants, we understand that the current tax treatment does deter employees from exercising options and becoming true company owners. Although the proposal appears to be good news for employees at private companies who have equity comp, some provisions in the law could hinder its effectiveness, as we explained in our commentary on HR 5719 last October.

After its House approval last year, the Empowering Employees Through Stock Ownership Act went to the Senate, which did not take it up. However, in late June 2017, it was reintroduced as a separate bill with the same title in the Senate (S.1444). The Senate legislation is very similar to the House bill of last year and has bipartisan support: Its sponsors are two members of the Senate Finance Committee, Mark Warner (D–VA) and Dean Heller (R–NV), and two members of the House Ways and Means Committee, Eric Paulsen (R–MN) and Joseph Crowley (D–NY). Details of the proposals are available in the press release on it that was issued by Senator Warner's staff.

Although more than 70 companies have expressed support for the legislation, the prospects for its enactment remain somewhat uncertain in the current Congress, which seems to be preparing for a major effort at comprehensive tax reform (see the myStockOptions FAQ on how that could affect stock compensation). One obstacle could be finding a way to offset the cost of the proposed tax provisions. Although the legislation would allow only the deferral of taxes, not their elimination, the delay in tax payment would impose a revenue cost on the federal government.


Five Trends in Restricted Stock/Units

Barbara Baksa, Executive Director of the National Association of Stock Plan Professionals (NASPP) identifies five trends in the usage of restricted stock and units, from the 2016 Domestic Stock Plan Design Survey, co-sponsored by the NASPP and Deloitte Consulting.

Trend #1: Use of time-based stock grants and awards is still on the rise.

The percentage of companies issuing stock grants and awards increased by 10 percent since our last survey (up from 81 percent in our 2013 survey to 89 percent in 2016). In addition, among those companies that use restricted stock and unit awards, close to 40 percent of respondents report that their usage of these vehicles has increased at some level of their organization over the past three years, while only 18 percent report decreased usage over the same time period. Overall, that nets out to greater usage of restricted stock and units by more companies than in past surveys.

Trend #2: Time-based stock grants and awards are the equity vehicle most frequently granted to lower-ranking employees.

Stock grants and awards are the equity vehicles most commonly granted to lower-ranking employees, with 77 percent of respondents granting awards to middle management (approximately three times the percentage of respondents that grant either stock options or performance awards at this employee rank). Fifty-two percent of respondents grant restricted stock/units to other exempt employees (compared to 13 percent for stock options and 11 percent for performance awards) and 19 percent grant these awards to nonexempt employees (compared to 7 percent for stock options and 3 percent for performance awards).

Trend #3: Time-based stock grants and awards are also common at the top of the house.

Stock grants and awards are even more common for senior-level employees with 79 percent of respondents granting awards to the CEO, CFO, and named executives, and 84 percent granting awards to other senior management. The five-point drop in usage of restricted stock/units at the CEO, CFO, and NEO level as compared to other senior management is likely due to the increased usage of performance awards in the C-suite.

Trend #4: Restricted stock units are the vehicle of choice among various types of time-based full-value awards.

The 2016 survey saw a continuation in the shift away from restricted stock awards toward restricted stock units. Respondents reporting that they currently grant restricted stock awards* dropped from 44 percent in 2013 to 31 percent in 2016, while respondents currently granting restricted stock units* increased from 77 percent in 2013 to 83 percent in 2016.

* Awards not in lieu of cash.

Trend #5: Awards are most commonly granted on an annual frequency.

The overwhelming majority of companies that make grants of stock and units do so on an annual basis (ranging from 95 percent of respondents for CEOs, CFOs, and named executives to 75 percent of respondents for nonexempt employees). In addition to annual grants, stock/units are most frequently awarded upon hire, promotion, and for retention purposes.


More Employees Rank Company Stock as Their Top Benefit

BOSTON — For many people, their most important workplace benefit is a 401(k) or health insurance, but for a growing number of employees, a company stock plan is their top benefit. According to research1 from Fidelity Investments®, 16 percent of employees say company stock is their most important benefit, up from 10 percent in 2014.

For employers, company stock plans can help attract and retain top talent. Almost two-thirds of employees (63 percent) said that participating in their company stock plan gives them a sense of ownership of the company, and 53 percent said it makes them feel more loyal to their employer. Nearly half of employees (49 percent) said that a company stock plan was an important factor when considering a new job.

"Company stock plans can be a great tool to engage employees and improve their overall financial confidence," said Kevin Barry, executive vice president, Stock Plan Services at Fidelity Investments. "These plans can also motivate employees, as over half of respondents indicated participation in their company stock plan increases company loyalty and inspires them to work harder."

Employees using company stock to deal with major expenses, avoiding home/401(k) loans

Fidelity also examined how company stock can help employees tackle major expenses. Fifty-eight percent of people surveyed said they would pay for a major expense by selling company stock instead of borrowing from their 401(k) or taking a home equity loan. While there may be tax implications to selling company stock, it can be more cost efficient in the long run than tapping your retirement account or borrowing against your home.

The survey also indicated that employees are not dependent on company stock to fund their retirement. While 40 percent indicated that assets from company stock will play a role in funding their retirement, only 7 percent said that they expect those assets to be a primary source of retirement savings. Forty-two percent of employees indicated that assets from company stock will be more of a "cushion" alongside other savings vehicles.

Most employees expect the value of their company stock to increase

Most employees are optimistic about the future performance of their company stock. Eighty-three percent of employees who participate in their company stock plan expect the value of their company's stock to increase over the next few years. More than half of employees surveyed (52 percent) indicated that they expect the value of their company's stock to increase at a modest rate, and more than one in five (21 percent) employees expect the value to increase substantially in the next 12 - 36 months.

Employees are also holding the stock they acquire through their company stock plan. Of the 49 percent of those that sold stock they acquired through their plan, 40 percent held the stock for more than two years.

"Employers need to be more competitive to attract and retain the best and brightest, and a company stock plan can be a key...

Equity Compensation Advisor News: July/August 2016

equity compensation advisor

Here's the latest news, tips and information for financial advisors that help clients with the diversification of their company stock and options.

Helping Clients Get More From Their Equity Compensation: Companies grant more than $110 billion in equity awards every year, and many have concerns about how much employees value these awards.  UBS research across industries and service providers found that two out of three participants do not place significant value on the equity awards they receive.  However, this misperception can be corrected by taking three simple steps.

Proposed Legislation Encourages Broad Use of Equity at Private CompaniesRecent bills introduced in the House and Senate would make it easier for startups and private companies to give employees an equity stake in their company's success.  These bills are aimed at encouraging non-publicly traded companies to grant broad based stock options or stock settled RSUs (Restricted Stock Units) to employees with increased flexibility for paying the taxes owed.  Under the current law, employees generally pay taxes in the year they exercise options or when their RSUs vest, but this bill would allow them to defer those taxes for up to seven years as explained in this article.

Employee Stock Options Today: Richard Friedman from the Ayco Company describes the history of stock options and the results of their updated survey of the design features of these programs. While options remain a relatively common long-term incentive award, they no longer are the primary award for executives at most U.S. public companies. Yet, options continue to be the most utilized compensation mechanisms at pre-IPO start-up companies where they are a means of sharing future growth of the company with most or even all employees without having to distribute cash.

New Articles on the StockOpter University: 

Modeling Diversification Strategies: The 2016 tax update of StockOpter Pro was released in April with several enhancements for modeling 10b5-1 and other diversification strategies.  If you haven't taken a look a StockOpter Pro lately checkout the free demo and the updated users guide.

Other StockOpter News:

  • The StockOpter Support FAQs have been converted to WordPress and completely updated.  The new platform for Frequently Asked Questions is separated into different categories and can be easily searched for answers.  Need to know the difference between StockOpter Pro and  Search Overview.
  • We are constantly updating our tools with new ways to facilitate equity compensation diversification and reinvestment decisions. We’re currently working on a new "owned/long" share diversification table, chart and dashboard in that will help users to project and compare strategies to reduce concentrated company stock positions. The next edition of this news brief will provide more information on this enhancement.

Companies Trending Away from Time Based Awards

In a recent Equilar blog titled “Companies Just Say No to “Pay for Pulse,” the author cites a recent study of Equilar 100 companies that found 70% of the executive pay mix is now performance based.  In another report (Equilar’s 2015 Equity Trends Report), “nearly 70% of S&P 1500 companies used performance awards in 2014, up from about 50% in 2010.”

There has been a great deal of evolution in the mix of equity incentive compensation vehicles and terms over the last decade. The use of stock awards has surpassed that of stock options and performance based vesting continues on an upward rise. In the wake of Dodd-Frank, Say-on-Pay, and other measures, time based vesting of options and stock awards, or, as some call it, “pay for pulse” is diminishing.

Time will tell whether time-based vesting will vanish or remain a part of company stock plans. There is an argument that while performance based incentives are suitable for high level executives – those with the most control over corporate decisions, strategy and performance – there may be benefit to offering time based vesting awards to other employees of the organization where job functions are less strategic in nature and "retention" is the key objective of the award.


Updated Survey of Share Ownership Guidelines and Stock Retention Requirements

From the Ayco Compensation & Benefits Digest: March 18, 2016

Share ownership guidelines remain a common feature in place at an overwhelming majority of public companies. The basic premise of mandating ownership of company stock is that the interests of senior management will more closely align with those of shareholders. In the current “say‐on‐pay” era, this is perceived to be of importance. Whether share ownership results in better corporate or stock performance remains to be proven.

We have been tracking the design of share ownership guidelines at Ayco corporate partners for the past 25 years. In the early 1990s, only about a quarter of the companies we monitored had guidelines, while over 90% of companies now have ownership requirements for senior executives – a percentage that has remained fairly constant over the past 10 years. What has expanded are those companies with share retention requirements related to their ownership guidelines. Most commonly, retention must be maintained until the minimum ownership levels are attained. The following reflect what we now see among the U.S. companies we monitor:


10 Companies with Generous Stock and Option Programs

By Michal Addady from Fortune

Company stock and option programs (Equity Compensation) can serve as additional ways to pay workers beyond wages or salaries. These programs supplement base pay to provide competitive compensation, can act as a recognition tool to award employees for good work, and they help ensure that employees’ interests are aligned with shareholders. These 10 employers from Fortune‘s 100 Best Companies to Work For list understand the importance of those three objectives and offer their employees ample equity programs. Here’s a look at what the best employers in the U.S. are doing to retain their highest-performing employees.



Professors Recognized for Research on Perceived Value of Employee Stock Options

AICPA, CIMA Recognize 3 Professors for Management Accounting Research on Valuing Employee Stock Options

Greatest Potential Impact on Management Accounting Award given at AAA Management Accounting Section’s mid-year Meeting.

Dallas (Jan. 11, 2016) — The  American Institute of CPAs (AICPA) and the  Chartered Institute of Management Accountants  (CIMA) have recognized three professors for research into the impact of corporate employee compensation programs with the Greatest Potential Impact on Management Accounting Practice Award.

The AICPA and CIMA, under the banner of their Chartered Global Management Accountant® (CGMA®)(CGMA®) designation, sponsored the award presented to Anne Farrell associate professor of accounting, Farmer School of Business, Miami University, Oxford, Ohio; Susan Krische, associate professor of accounting and taxation, Kogod School of Business, American University, Washington, D.C.; and  Karen Sedatole, professor of accounting, Eli Broad College of Business, Michigan State University, Lansing, MI.  Their paper, “Employees’ Subjective Valuations of Their Stock Options: Evidence on the Distribution of Valuations and the Use of Simple Anchors” explores the benefits of educating employees on how to better understand the value of employee stock options received as part of their compensation.

Wim A Van der Stede, CIMA Professor of Financial Management, Head of Department of Accounting, London School of Economics, presented the award at the 2015 AAA Management Accounting Section’s mid-year meeting in Dallas, and includes a $2,000 stipend.

“Many employees don’t fully understand the value of stock options as part of their compensation package.  As a result of the research conducted by these professors, HR professionals can now justify creating education programs that will eventually make compensation and employee motivation an easier task,” said Van der Stede. “Academic research like this is crucial to helping management accountants maximize value for their organizations so that they in turn can achieve greater and sustainable success.”

The award underscores the commitment of the AICPA and CIMA to elevating management accounting around the world. The organizations partnered to launch the CGMA designation in 2012 to help people and businesses succeed by producing and recognizing competent and confident management accounting professionals able to steer business and lead their organizations to make better decisions. Through the CGMA designation, the AICPA and CIMA sponsor the Greatest Potential Impact on Management Accounting Practice Award to reflect the important role the academic community plays in helping shape the next generation of business through management accounting.

Created in 2009, the award recognizes academic research considered to most likely have a significant impact on management accounting. Eligible papers must have been published within the previous five years and submitted by the authors, or nominated by peers.


Dividing Stock Compensation in Divorce

By Jennifer Namazi, Editorial Director, NASPP

Divorce is almost never pretty, and sometimes the more there is at stake, the more complicated the process becomes. In today’s blog I’ll explore how a couple of states are taking a more definitive stance on how stock compensation is handled in divorce proceedings.

In Illinois (an equitable distribution state for purposes of dividing marital assets in a divorce), recent changes to their divorce laws included that stock options and restricted stock acquired during the marriage and prior to a divorce are presumed to be marital property unless the holder can prove they were acquired by way of a gift, legacy, or in exchange for other non-marital property. As a result, Illinois divorce courts will allocate and divide the applicable stock options or restricted stock (or something else representative of their value) in awarding each spouse property from their marital estate. This appears to streamline many of the “are they or aren’t they?” property of the marriage questions. According to a blog by Illinois divorce attorney Mark Schondorf,

“Courts understand that stock option’s values may not be realized until years after a divorce is finalized. The new divorce laws instruct the courts to consider 1) the vesting schedule of an option; 2) the time between the granting of the option and the exercise date and 3) whether the option was granted as a reward for past performance, or whether it was designed to promote future performance or employment. It would be unfair for the court to award the husband a large portion of a stock option’s value if the wife would have to work for a number years after being divorced to realize the options value.”

On another divorce related note, a Massachusetts court of appeals ruling confirmed that the vesting of RSUs counts as income for child support purposes. In the trial court case of Hoegen v. Hoegen, the father claimed that he retained his RSUs as property division under the parties’ divorce judgment, and that the wife waived all rights, title and interests in the RSUs. Accordingly, he argued that income from the RSUs should be excluded when the parties periodically recalculated child support after the divorce by agreement.  The trial court agreed with him. The mother appealed the case and the appellate court reversed the trial court’s decision, on the grounds (in part) that “just because you receive the value of an asset at the time of divorce, it does not mean that the income you derive from that asset should not be included in the definition of gross income for purposes of a subsequent child support calculation.” (Source: Sally & Fitch Blog)

It’s not surprising that stock compensation can be a significant issue at the core of many divorce and post-divorce cases. In years past it seemed that many states took a reactive approach to handling this type of compensation in divorce litigation, and the...

Older Entries »