Skip to content
EQUITY ADMINISTRATION

Equity Plan RFPs: The Right Solution Starts with the Right Questions

Evaluating a new stock plan provider requires careful consideration of various factors which can be a complex and time-consuming process. These factors include the provider’s product improvement plans, technology capabilities for plan administrators and participants, and data security. Asking the right questions in a request for proposal (RFP), could help gain a comprehensive understanding of a platform’s capabilities and ensure they align with your business’s short and long-term needs.

Finding the right questions to ask and knowing where to start may be difficult. To support your efforts, we’ve identified four key areas and associated questions that you may want to consider when evaluating a stock plan provider for an RFP.

 

Maximize Your Advantage with the Right Questions

Switching to a new equity compensation provider requires effort and dedication. Asking the right questions may help you in making an informed decision and avoid any missteps. 

 

If you’d like to learn how an equity compensation platform can help you enhance productivity, increase participant engagement and simplify your equity plan management, just ask. We’re here to answer any—and all—questions you may have. 

  1. Product Improvement Commitment

    It's important to consider an equity compensation provider's ongoing commitment and investment in technology enhancements, as this may signal the level of support for the platform. 

     

    • What is the stage of the stock plan provider’s platform in the software development lifecycle? This question could help determine the level of maturity of a provider’s technology solution, and whether there are any major development gaps that haven’t yet been addressed. 
     
    • How much does the provider spend to enhance their platform regularly? Ensuring that a provider is regularly committing to improving its platform may help companies ensure the solution will scale alongside the long-term needs and growth of their business. 
     
    • What does the provider’s product roadmap and enhancement release schedule look like? Evaluating a stock plan provider's product roadmap, and understanding their release schedule, could help companies gauge their pace of innovation in the short—and long-term while ensuring alignment with their business’s needs. 
     
    • What investments has the provider made and committed to in the last 2 years and next 2 years to improve the product? This will help companies understand both the health of the stock plan provider’s commitment to the platform and how they’re planning to grow their technology offering. 

  2. Plan Administrator Experience

    It is important to understand the plan administrator experience and platform features available to simplify management of a company’s stock plan—from workflow automation to reporting capabilities. Below are a few important questions that are sometimes omitted from an RFP, but are worth considering: 

    • Does the stock plan platform offer workflow automation?  This type of functionality is still relatively new and not universally available. Yet, some equity compensation providers—including Morgan Stanley at Work—allow companies to schedule multi-step processes to run systematically according to a pre-set sequence, with new tasks automatically triggered based on the resolution of previous tasks. This type of “set and forget” functionality can not only save significant time for plan administrators, but also vastly reduces manual processing errors and transactional delays. 

     

    • Can administrators run real-time reports? Beyond empowering plan administrators to generate reports on the fly, real-time processing and reporting allows them to base forecasts and projections on accurate data. 

     

    • Is a sandbox environment available?  This allows plan administrators to combine hypothetical and actual requirements for scenario testing and budget forecasting. An on-demand sandbox environment reduces guesswork by simulating administrator processes and participant action and provides a more accurate representation of expected outcomes. 

     

  1. Data Security

    While stock plan RFPs typically ask about measures used to protect participant confidentiality, specifics of data hosting and transfers are often missing. Companies may want to consider including these two questions to their RFPs:

     

    • How does the equity compensation platform handle data transfers? This question could help confirm whether an equity provider shares data with third parties using batch interfaces that send flat files or integrates using application programming interfaces (APIs). While both methods have utility, APIs typically allow for real-time data transfers resulting in more efficient equity administration.

     

    • Is client data hosted locally or by a third-party vendor? Equity compensation providers that host and process data locally, instead of relying on third-party vendors, can typically maintain higher standards of data protection

  2. Plan Participant Experience

    Participant experience is one of the biggest differentiators among equity compensation providers. RFPs typically ask about customer service support, call center strengths, issue resolution processes and service level agreements—all important aspects of the user experience. However, companies may consider asking questions about platform features:

     

    • Can the platform be customized with the company’s brand?  Having a branded equity portal could enhance the participant experience by providing a personalized and connected feel.

     

    • Do participants have access to real-time stock quotes, exercise options and complete transactions through a robust mobile app?  A good mobile experience may be important if there are participants that prefer or need to access their equity holdings on-the-go. If the mobile interface varies considerably from the desktop interface, it may deliver a sub-optimal participant experience.

     

    • Is the platform equipped with multilingual and multicurrency support for global employees?  As companies expand their global workforce, they may want to ensure that the equity platform supports the languages and currencies of those geographical locations.

     

    • Can participants bring over and view historical transactions including the tax withholding information?  Not every equity platform provides historical data and, if they do, there may be limitations on how far back the data goes. If participants need to access prior tax withholding information or their transaction history, this could present a challenge.

Maximize Your Advantage with the Right Questions

 

Switching to a new equity compensation provider requires effort and dedication. Asking the right questions may help you in making an informed decision and avoid any missteps. 

If you’d like to learn how an equity compensation platform can help you enhance productivity, increase participant engagement and simplify your equity plan management, just ask. We’re here to answer any – and all – questions you may have. 

Related Stories

Discover more unique perspectives to motivate your employees and fuel your business.

Morgan Stanley and its affiliates and employees do not provide tax or legal advice. Please consult your personal tax and legal advisors for matters regarding taxation and tax planning and legal matters.

© 2024 Morgan Stanley Smith Barney LLC. Member SIPC. Privacy Policy

Morgan Stanley PO Box 95002 South Jordan, UT 84095 USA

CRC# 4039622 (12/2024)