United States

Certified Equity Professional Institute Publishes Draft Guidance on Risk Controls for Equity Compensation

6 February 2007

Source: CEPI

Santa Clara, January 19, 2007 – The Certified Equity Professional Institute (CEPI) at Santa Clara University, the only certification body for equity compensation professionals, today published the first draft of Phase 1 of their research project, GPS: Guidance, Procedures and Systems, for public comment.  This landmark research project is underway to provide guidance to public companies and plan administrators on implementation and maintenance of effective controls to mitigate risk in administration of equity compensation plans.

“Regulatory changes, such as FAS 123R, have added complex administration challenges and increased exposure to what used to be a fairly low-risk process.  This process is now subject to public scrutiny and it’s critical for companies and plan administrators to not only understand the complex rules surrounding equity compensation but also to implement and maintain effective controls to support those requirements—both within the company and externally with vendors,” said Emily Cervino, CEP, Director, CEPI.  “The CEPI has launched this research initiative to establish clear and comprehensive guidelines.  These guidelines will help ensure companies are correctly identifying operational gaps and instituting appropriate controls for managing equity compensation plans.”

Phase 1 of the GPS research project specifically addresses General Administration and Grant Practices associated with stock options granted to U.S. employees that vest over time.    The CEPI has opened a public comment window for the first draft that will culminate with public roundtable sessions in Santa Clara and New York City in March 2007.  A copy of the publication as well as details on the public comment can be found on the website:  http://cepi.scu.edu/gps_public_comment.htm.

Future phases of the GPS project will include Accounting, Exercise Processes, Tax/Payroll, Changes in Employment Status and Legal Issues.  Subsequent research will address non-U.S. employees, performance vesting and other types of equity awards.

“The CEPI at Santa Clara University provides the only source of professional certification in the equity compensation field.  As such, the CEPI is the natural choice for leading this research effort,” said Carol Rutlen, Project Leader. “This project is an outlet for the industry to provide thoughtful guidance for itself.  Companies issuing equity compensation and auditors alike can benefit from this research, allowing them to focus on relevant issues and areas of risk.”





About the Certified Equity Professional Institute

The Certified Equity Professional Institute (CEPI), at Santa Clara University, is the only certification body for equity compensation professionals.  The CEPI curriculum covers accounting, corporate and securities laws, taxation, and administrative and contractual considerations, ensuring that CEP designees have achieved a required level of expertise in all of the relevant areas of equity compensation.  More than 65 percent of the Fortune 1000 companies have CEPs supporting their stock plans.

About Santa Clara University

Santa Clara University, a comprehensive Jesuit, Catholic university located in California’s Silicon Valley, offers its 8,397 students rigorous undergraduate curricula in arts and sciences, business, and engineering, plus master  ’s and law degrees. Distinguished nationally by the second highest graduation rate among all U.S. master’s universities, California’s oldest higher-education institution demonstrates faith-inspired values of ethics and social justice. More information is available at www.scu.edu