For many small businesses, one of the best ways to be competitive with large corporations is to offer an employee stock option program. By doing so, you make your employees your partners, and this sense of ownership can help motivate them to help you grow your business. The historical problem with a stock option plan, though, has been in how to administrate. But there are now different options for software for employee stock management.
By utilizing equity and stock option software, you can ease a lot of the worries of your employee stock option plan as well as make your process much more transparent for any necessary outside auditing. The ability to take the headache out of your employee stock option plan will make your overall human resources and financial management pictures less messy and more headache-free.
When comparing pieces of employee stock option software, among the key points to consider are:
1. The ability of the equity option software to handle different vesting options;
2. The way the stock options software manages option grants;
3. The FAS 123R compliance of the options software.
Action Steps
The best contacts and resources to help you get it done
Find option analysis software that will handle your employee vesting plans
Different employees will have their stock become vested at different rates. This is a simple fact of employee compensation structures. By finding software that is able to calculate when your employees vest, it will take a lot of the guesswork out of your stock option program management.
I recommend: Stock Informatics instantly updates calculations for employee vesting, depending on the information you input.
Ensure that the stock option administration software can handle how you grant options
Every company handles option grants differently. Yours may do so at hiring as part of a compensation package, after a certain time in service or even randomly as a production bonus. Regardless, it's important that the employee stock option software you use can handle your company's way of granting stock.
I recommend: OptionTrax handles a variety of option grant methods and even produces reports that can be delivered to your employees.
Use FAS 123R-compliant software for employee stock options
While you never want to consider it, an audit is always a possibility. By working with software that is in compliance with FAS 123R, you can ensure that your stock option program is ready for auditing before it happens.
I recommend: eProsper's
CapMx is one of the few web-based stock option programs that is FAS 123R-compliant. Equity Methods'
Option Navigator also ensures that your plan is in compliance with FAS 123R.
Tips & Tactics
Helpful advice for making the most of this Guide
- When choosing equity and stock option software, make sure that it's flexible for your future needs. Your stock option program can grow and change, and you don't want to have to buy new software when it does so.
The official source of Equity and Stock Option Software is
the Equity and Stock Option Software page at Business.com
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