Community Corner

Charles Schwab Announces Plans to Launch Equity Award Consultation Team for Corporate Stock Plan Clients


At the 2010 National Association of Stock Plan Professionals (NASPP) conference in Chicago, Ill., and on the heels of a highly successful pilot, Charles Schwab today announced plans to launch a new Equity Award Consultation Team for corporate stock plan clients. The team, which will formally launch in the first quarter of 2011, will provide personalized education and guidance for U.S.-based participants in the corporate equity plans serviced by Schwab, regardless of a participant's level at their company or the value of their equity holdings.


"Based on research we have done and anecdotally from speaking with employer clients, we know that there is a gap in the industry today in making education and guidance available to people participating in corporate equity plans, particularly non-executive level employees," said Trish Cox, senior vice president of Charles Schwab Corporate Brokerage Services. "Our new Equity Award Consultation Team is designed to help all participants in the plans we serve better understand, appreciate, and utilize their equity awards."

In a survey* conducted last year among 200 corporate stock plan decision makers, Schwab found that nearly half of survey respondents (48%) consider educating employees about the features and benefits of their stock plan a significant challenge. In addition, 78 percent said that educating employees on stock plan value and benefits will be an important focus for their company during the next two years.

Cox added that Schwab's research found a significant number of corporate stock plan participants to be confused about the features and benefits of their plan, underscoring the importance of education. Using an academic scale to grade the level of understanding about the company stock plan, 36 percent of survey respondents gave their non-executive employees a "C" grade. Executive level employees received higher marks from survey respondents, but still only 55 percent of respondents gave their executives an "A" for their level of understanding of company stock plans.

Schwab's new Equity Award Consultation Team is made up of experienced professionals who are specifically trained to provide guidance on equity awards. Among early adopting companies participating in the pilot, there was a 97 percent satisfaction rate for plan participants who interacted with the Schwab team. Specific guidance the team will provide to plan participants includes:

-- Holding 1-1 personalized consultations with plan participants regarding stock options, restricted stock awards, restricted stock units, and performance awards

-- Educating employees about their current equity award holdings and how award milestones, such as lapsing, vesting and expiration, can affect these holdings

-- Explaining choices available for managing those holdings within the context of the employee's overall investment portfolio

"Reinforcing the value and benefit of equity awards for our employees is important to the plan's overall success, and Schwab's Equity Award Consultation Team has helped us do that by increasing participants' understanding and engagement in our plan," said Sara Wade, vice president, compensation and benefits with St. Louis-based Express Scripts, Inc., one of the largest pharmacy benefit management companies in North America and a participant in Schwab's pilot program. "In addition, making this kind of financial help and guidance available in the workplace can drive overall employee loyalty, which is also a significant benefit to our company."


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