To help workplace leaders keep pace in a shifting equity compensation environment, Craig Rubino, Executive Director at Morgan Stanley at Work, sat down for a virtual discussion with Steve Campbell, Stock Administration Manager at PayPal, Denise Glagau, Managing Partner at Baker McKenzie and Michelle Tomasetti, Partner at Infinite Equity, to explore current market trends. Below are some key insights from their discussion:
How Market Volatility Is Shaping Equity Compensation Programs
In a rapidly transforming market environment, workplace leaders need flexibility to evolve. To keep equity programs compelling amid volatility, some companies are:
- Pairing options with restricted stock units (RSUs) or performance-based equity to reduce employees’ risk exposure while preserving their upside.
- Making employee stock purchases more affordable by issuing fractional shares.
- Engaging in tender offers or other liquidity programs if they plan to stay private longer.
“As things change, it’s important to reevaluate equity programs so they continue to meet corporate goals,” Steve Campbell noted. “However, there’s something to be said for staying the course. Stability matters when it comes to compensation, and new approaches only make sense if they deliver greater value to employees.”
How Regulatory and Tax Changes Impact Equity Compensation
Shifting tax laws and compliance obligations are heightening administrative complexity for workplace leaders, both domestically and globally. In response, companies may want to:
- Proactively monitor legislative and regulatory reforms to assess the possible downstream impact on employees.
- Enhance employee education where new rules affect them by using multi-channel communications, such as videos, webinars and AI-driven chatbots.
- Leverage technology to improve reporting, enhance governance and strengthen audit trails.
“New regulations often drive heightened compliance requirements, accelerating the need for better, more connected technology,” Michelle Tomasetti noted.
How Equity Compensation Leaders Are Adapting to Change
“In a competitive market, equity professionals seeking to attract and retain top talent can benefit from remaining open to change,” Craig Rubino said. This could include:
- Testing AI tools to assess which ones may drive equity plan efficiencies and which should be approached with caution.
- Benchmarking how existing technologies are used relative to industry peers to uncover opportunities for improvement.
- Conducting a health check to pinpoint practices, processes and systems ripe for modernization.
As Denise Glagau noted, “In a complex regulatory and operating environment, equity compensation professionals who listen to their employee needs, evolve with the times and try new approaches may be better equipped to structure equity programs that are compelling to both new and long-term employees.”
By keeping this core value in mind, workplace leaders can continue fostering a sense of employee ownership regardless of prevailing market conditions.
For a more detailed market outlook and insight into actionable strategies to consider, watch the full virtual discussion.
