Santa Clara University

7th Annual CEP Symposium
December 8, 2010

The Best One Day Event in Equity Compensation


Thank you to our sponsors for making this such a successful event: 

Premier Sponsors

General Sponsors:
  • American Stock Transfer & Trust Company, LLC
  • BNY Mellon Shareowner Services
  • Deloitte Tax
  • Independent Stock Plan Advisors LLC
  • Solium Transcentive
  • UBS
  • Global Shares

7th Annual CEP Symposium Presentations

All of the presentations are in pdf format. There are two files for each presentation - one file is a pdf of the actual slides.  The other file is a pdf of the slides printed two per page.  Download either format by clicking on either the "Slides" or the "Handouts" link.

All material presented here is covered by US Copyright laws.


General Session:
Recipe for Success: Brewing Up Effective Participant Communications

Stock compensation can represent a significant expense for a company and a sizable payout for employees, and yet many employees don't understand their equity benefits, viewing any gain as a surprise windfall rather than a part of their total benefits package. With many participants facing cuts in other benefits programs and plan sponsors more closely measuring the return on costly employee stock plans, improving participant knowledge of these important programs becomes a critical component to both employer and employee. This session will describe communications programs designed by Starbucks Coffee Company, in partnership with Fidelity Stock Plan Services, to address the unique challenges of educating global participants on their equity compensation programs.

Speakers: Michelle Lundquist, Communication Consultant, Fidelity Investments and Billy Vitense, Manager, Stock, Starbucks Coffee Company


Breakout Session I

Finding Your Bearings With Performance Awards

With performance awards drawing increased attention and interest, the time is right for the next installment of the CEPI's highly acclaimed research series, GPS|Guidance|Procedures|Systems. This fourth installment in the CEPI’s research - GPS|Performance Awards - will serve as a user’s manual for companies to understand key components of performance awards, appreciate complexities of design and financial reporting, and systematically review and enhance administrative procedures. This “world premier” of the final publication will offer attendees a glimpse into the complex world of performance awards and provide a roadmap for companies to tackle this challenge effectively. At this session all attendees will receive a copy of the publication. 

Panelists: Carol Rutlen, Rutlen Associates Terry Adamson, Radford, and Fred Whittlesey, Hay Group


Walking the Line: Benefits and Risks in Stock Plan Communications

With apologies to Johnny Cash, it does feel like we have to "Walk the Line" with employee education and communications. We all know how important it is for employees to understand their equity awards and have the right information to make critical decisions, but are we delivering the right information and how can we do that without crossing into the dreaded "giving advice" arena? This lineup of experts will shock and enlighten you with graphical examples that are guaranteed to make you re-think what is "information" as opposed to "advice". Rounded out with best practices, examples of communicating value and samples to take home, you'll leave this session with a liberating new perspective and a refreshing realization that you may not be so close to that line.

Panelists:  Robert J. Callanan Jr.,- UBS Financial Services Inc., Rachel Murillo, CEP – NASPP, and Jennifer Tardif, CEP – Solium Transcentive


Creative Ideas for Burn Rate, Dilution, & Share Pool Management

Equity programs face greater scrutiny from shareholders, regulators, and the public than they did just a few short years ago. Company shareholders are pressuring management to reduce burn rates and dilution in order to maximize their return. For many companies this will result in dramatic changes in plan design, allocation of equity within the organization, and even replenishing the pool of shares. A major driving force of this change is the policies promulgated by Institutional Shareholder Services.

This session will focus on ideas and concepts for understanding and reducing burn rate and managing dilution and company share pools. We will touch on key aspects of ISS policy including the Burn Rate and Shareholder Value Transfer tests. It will include basic examples illustrating the policy and provide strategies for managing an equity program within the guidelines. We will go beyond traditional share pool management by exploring alternative strategies for managing dilution and maximizing the share pool. This will include delving into Net Exercise Methods, Share Buy-Back programs, and fungible share provisions, all while keeping a keen eye on any administrative challenges, valuation impact, and investor perceptions.

Panelists: Jon Burg, FSA – Radford Valuation Services, Marsha Tepper, CEP - Morgan Stanley Smith Barney, and Jewon Wee – Independent Stock Plan Advisors LLC


From Alabama to Wyoming: Getting Your Mobility Compliance into an Ideal State

With the slow economic recovery, state budget deficits continuing to make headlines, and news of New York’s successful fishing expeditions for extra revenue being widely publicized, states have a renewed focus on an important source of often missed revenue associated with mobile individuals who work in different states at some point during the equity lifecycle. Many states are also implementing new higher income tax and withholding rates on equity income to cover budget shortfalls. This session will provide an overview of the various considerations associated with extending equity to these mobile employees including how to determine taxable income and the various withholding and reporting requirements. Adam Lautner from Genentech will share his experiences associated with Genentech tackling compliance for this mobile population, offer practical solutions for administratively challenging areas such as tracking these individuals and dealing with double withholding. Carmen Elliot from Juniper will share their unique approach to identifying and tracking business travelers. In this session we will also review the results of the Rutlen 2010 State Mobility Survey.

Panelists: Carmen Elliot, CEP - Juniper Networks, Inc., Kate Forsyth - Deloitte Tax LLP, Adam Lautner - Genentech, Inc. Marlene Zobayan, CEP - Rutlen Associates LLC


General Session:
Equity Compensation Jeopardy

Pull up a chair and participate in one of the world's most popular game shows. In our unique version, everyone is a contestant -- testing their knowledge of today's hottest equity compensation topics. Will you take Plan Design for $200 or Equity Morality for $100? Who will make it to Final Jeopardy? Don't miss out on the fun.

Hosted by Barbara Richely, CEP - E*TRADE Corporate Services, with Inta Abele, CEP - Charles Schwab, Lydia Terrill, CEP - Gunderson Dettmer, and Dan Walter, CEP – Performensation Consulting


Breakout Session II

Section 6039 & Cost Basis Reporting: The Critical Role for Equity Compensation

Under Section 6039, the IRS now requires new information returns for ISO exercises and ESPP transfers beginning in 2010. The Panel will address the dates, applicable persons, and information required under the 6039 final regulations. Additionally, the IRS has mandated cost basis reporting effective January 1, 2011, affecting employee stock option exercises, as well as stock purchase and vesting events. This Panel will focus on the special challenges and requirements applicable to in-house equity professionals under both of these provisions. Corporate actions present an additional set of implications for basis reporting, and adjusting employee award and share records.

Panelists: Rick Berge - Ernst & Young, Andrew Schwartz, CEP - BNY Mellon Shareowner Services, and Debbie Tsoi-A-Sue, CEP - Yahoo! Inc.


Achieving Year End Nirvana

Year-end can be one of the most stressful times of the year for equity compensation professionals, but it doesn’t have to be! Seasoned equity compensation professionals will highlight the key issues that should be at the “top of your mind” for year-end tasks related to financial reporting. You’ll leave this session with the information you need to plan your year-end tasks as they relate to financial reporting with confidence.

Panelists: Barbara Baksa, CEP - NASPP, Darrin Short, CEP – Equinix, Inc., and Robyn Shutak, CEP – NASPP


Employment for Life? Legal & Tax Implications of Unexpected Changes in an Employee’s Status

In this session, the speakers will address changes in the employee's status over the life of an equity award including leave of absences; moves from full-time to part-time status; termination of employment due to death, disability or retirement; change of control of the issuer; and transfers from subsidiary to subsidiary arising from corporate reorganizations or restructurings. The speakers will explain how such changes may effect the taxation of the equity award or raise new or challenging regulatory compliance issues. They will provide the audience with helpful tips as to how companies should design their plans and agreements to take these changes into account at the time the award is granted to minimize the impact. The speakers will address the U.S. and non-U.S. issues and will provide real-life examples of the kinds of unexpected changes that they have seen companies go through and how they have coped.

Panelists: Valerie Diamond - Baker & McKenzie LLP, and David Thomas - Wilson Sonsini Goodrich & Rosati, PC


Breakout Session III

Around the World in Just Over an Hour

Keeping up with changes in the taxation, legal and regulatory environment surrounding global stock plans can be a daunting proposition. Fortunately, this panel of experts has done the hard work for you! In this session, we will discuss the notable changes impacting US issuers of international stock plans, touching on key tax, legal and other regulatory developments in the past twelve months and discuss how Cisco responded to these developments. Along with some best practice suggestions from the panel, audience participation and experience sharing will be actively encouraged!

Panelists: Jennifer Kirk - Baker & McKenzie LLP, Mark Miller, CEP – Deloitte Tax LLP, Rive Rutke –Deloitte Tax LLP, and Bernice Toy – Cisco Systems Inc.


Oops! I Did It Again: Myriad Missteps & Misunderstandings in Finanical Reporting

Topic 718 (nee FAS 123R) is not new. We've been dealing with it and its complexities for over 4 years now. And yet again and again, we see the same mistakes being made by company after company. What are the most common mistakes? And how do you understand them well enough to allow you to avoid them?
This expert panel will review some of the errors they encounter over and over again, provide background on the topic, an explanation of the issue and steps to help your company avoid material and embarrassing financial reporting errors.
Areas of error covered will include: modification accounting (extensions of term and acceleration at terminations, impact on ISO status), forfeiture rates (estimation, application, and true ups), tax accounting after transactions (mergers, repricings, etc.), M&A accounting, failure to calculate APIC pool, accounting for ESPPs (including modification accounting for contribution increases and resets and rollovers), and last, but certainly not least, accounting for performance grants.

Panelists: Elizabeth Dodge, CEP – Stock and Option Solutions, Inc., Ellie Kehmeier, CPA - Creekview Consulting, and Liz Stoudt, CEP - Radford Valuation Services.


HR Boot Camp – No Nonsense Approach to Support Staff Education

HR is often the "voice" of Equity Compensation to employees, but how do you train and control that voice? How much and what do they need to know? How can you ensure you have appropriately knowledgable people at all locations? How do you keep them up to date? The bootcamp approach used by Qualcomm was very successful and well-received by attendees at all levels of HR.  Learn how the process was developed and delivered and discover the secrets of their success in delivering key points: What can HR say? What should HR not say? When should HR call on subject matter expertise from the equity administration team? This program was extremely successful at Qualcomm. Learn how it will work for you.

Panelists: Karen Needham, CEP – Charles Schwab, and David Reichel, Ph.D. – Qualcomm, Inc.


Evaluation Form

If you attended the Symposium, please take a moment to complete the evaluation form.  We need your input to make the 2012 CEP Symposium even better!
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