Exercising Flexibility in Share Incentive Scheme Management

2020 brought with it colossal shifts in mindset and for many a complete overhaul of legacy corporate structures. Share incentive scheme management is an area not untouched by these shifts. Connecting with isolated employees has never been more important. Ultimately, clear and digital communications of every kind have been needed to keep productivity levels high and burn-out scenarios low. 

The following areas of general changes in the way companies provide engagement and communication to employees will have a significant impact on the processes around exercising share-based payments to employees. 

A return to the human factor 

Remote working did a lot to shift our thinking around what employee support means. The human factor of our workplaces has never been more critical. But it’s often an area within share incentive scheme management that gets overlooked. Lost in the administration and the frenzy of trying to manage schemes efficiently, rewards administrators are at risk of losing touch with the true meaning behind the exercise process. In the exercise process, It has become critical that we convey and communicate in a simplistic but holistic manner.

What your millennial employees want, matters

Millennials make up the largest percentage of the workforce (over 40%) and will well into 2025. This means that the way that employees view updated information needs to be via an interactive, mobile-friendly portal. Ideally, this should provide employees with the ability to log in, accept awards, make elections and update their personal information.

Employees want to be independent and empowered 

Even some of the most astute investors seem to struggle with the complexities of incentive schemes. But that doesn’t mean they don’t wish to understand it and feel empowered to ‘self-help’ themselves to the information they need. That means it is the employer’s responsibility to ensure a simplistic view of value and visible wealth at varying levels of performance. Flexibility has become key employers need to provide information that is concise and clear. The adoption of technology for share scheme exercising is one of the avenues that empower employees by giving them the ability to have a snapshot of their holdings based off live market prices or equity values.

Global (but remote) participants 

Lockdown has enabled people to work remotely, not only from their local homes but from all around the globe. This has emphasized the need for companies to be able to cater for a global workforce. Your technology solution should therefore enhance workflow under all conditions, no matter where employees sit by means of a stable and secure internet connection.

A present-day snapshot: What does the exercising process look like without technology?  

The exercise process can be vastly different, depending on aspects such as your scheme in question and the preferences of your organisation. Whatever your approach, it is a process that encompasses multiple steps often complicated by global tax regimes, the need for accurate and efficient trading requirements and other no-less challenging facets. Without an adequate system, administrators need to carry the burden of calculating and conveying all exercise, tax and trading information, timeously and accurately. Furthermore, administrators carry the burden of making sure that employees comply with all restrictions on a case-by-case basis.

You know what that spells? M-A-N-U-A-L. 

And in a world that is digitally transforming, there is no longer room for back-breaking manual, repetitive work. 

Without technology, the exercise process and approvals are uncoordinated and usually paper-based. Instructions can also be delayed due to human intervention which can result in exposure to share price movement or market risk.

With manual calculations and an insecure environment in which data is transferred, there is a greater possibility of incorrect payments occurring, and companies will be far more vulnerable to fraud, human error and non-compliance to regulations and data privacy laws. 

Introducing Technology to the Exercise Process

In contrast, technology will remove most of these manual risks. Among other things, it will assist to manage all trading rules, restrictions on an employee level, and approvals. A good solution will then facilitate straight-through processing for trades that are initiated by employees in a controlled and secure environment, as well as creating an online election and automated calculation for bulk trade processes.

Systems will take care of all the heavy calculations for tax, payments and trades, and will provide an additional level of transparency to allow both the administrator and employee to track the progress of their trades and payment regardless of jurisdiction. A specialised technology will allow for approval levels at various levels of the organisation, to ensure the seamless execution of this potentially complicated process, without errors or delays.


Ultimately, technology allows the administrator to communicate with employees at each of the ‘right’ pain points to keep staff engaged and happy. And during these dark days, we can all do with a little bit of “happy”.

To view a demo of the ShareForce Incentive Plan management tool, fill in the form below or visit www.shareforce.net/contact


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