Transcentive Client Conference

Transcription

Philadelphia, PA
August 20, 2013
Tuesday, August 20, 2013
Westin Philadelphia
Philadelphia, PA
2 Enterprise Drive, Suite 402
Shelton, CT 06484
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This book contains general information only and is not a substitute for accounting, business, financial or tax advice. Before
making any decisions or taking any action that may affect your business, you should consult a qualified professional adviser.
© Solium Capital Inc. 2013. All rights reserved. The Solium logo is a trademark of Solium in the U.S. and/or other countries.
Contents
Agenda_________________________________________________________________________________________ 3
CPE and CEP Credits for Conference Attendees_______________________________________________________ 4
Conference Center Map___________________________________________________________________________ 4
Sessions
Unlock the Power of Ad Hoc Reporting______________________________________________________________ 5
Agenda
Tuesday, August 20, 2013
Time
Session Title
Location
8:00 AM - 8:45 AM
Breakfast and Conference Registration
Georgian Room
8:45 AM - 9:00 AM
Welcome and Opening Remarks
Presenters: Jim Wulforst and David Griffin
Georgian Room
9:00 AM - 10:10 AM
Unlock the Power of Ad Hoc Reporting
Presenters: Joe Purdy and Michael Mauro
Georgian Room
10:25 AM - 11:35 AM
Performance Plans: Using Transcentive Express to Manage Your
Complex Performance Plans
Presenters: Erin Herlihy and Craig Malan
Georgian Room
11:35 AM - 12:45 PM
Pitfalls and Misconceptions in Financial Reporting*
Presenters: Terry Adamson, Jennifer Baehr and Ruth Doyle
Georgian Room
12:45 PM - 1:45 PM
Lunch
Grand Ballroom
1:45 PM - 2:55 PM
Retirement Eligibility: Managing These Complex Tax Provisions in
Transcentive Express
Presenters: Erin Herlihy, Viji Karunakaran and Patricia Brown
Georgian Room
2:55 PM - 4:05 PM
The Inside Scoop: Optimizing Your Experience with Transcentive
Express
Presenters: Patricia Brown, Michael Mauro and Joe Purdy
Georgian Room
4:05 PM - 4:20 PM
Closing Remarks
Presenter: Patricia Landry
Georgian Room
4:30 PM - 6:00 PM Cocktails and Networking
Lobby Lounge
Performance Plans: Using Transcentive Express to Manage Your Complex Performance Plans_______________ 21
Pitfalls and Misconceptions in Financial Reporting____________________________________________________ 35
Retirement Eligibility: Managing These Complex Tax Provisions in Transcentive Express____________________ 43
The Inside Scoop: Optimizing Your Experience with Transcentive Express________________________________ 65
Closing remarks_________________________________________________________________________________ 85
Cocktails and networking_________________________________________________________________________ 85
Speaker Biographies
Industry Speakers_______________________________________________________________________________ 86
Staff Speakers__________________________________________________________________________________ 87
2
Synergy 2013 - Philadelphila, PA
* This session qualifies for 1 continuing education credit for the Certified Equity Professional (CEP)
designation.
Notes:
• All sessions qualify for a minimum of 1Continuing Professional Education (CPE) credit
• Clients who attend 4 or fewer sessions will receive 1 CPE credit per session. Clients who attend all
5 will receive approximately 6 credits for the entire event.
3
CPE and CEP Credits for Conference Attendees
Solium is pleased to offer CEP and CPE credits to Synergy attendees. Credits offered vary by session. Please consult the
conference agenda to review the number and type of credits provided for each session.
CPE credits: Clients who attend 4 or fewer sessions will receive 1 CPE credit per session. Clients who attend all 5 will receive
approximately 6 credits for the entire event.
CEP credits: Vary per session (Max: 5)
For all applicable sessions qualifying for CPE credits:
CPE Credits: Minimum 1 (Group-Live)
Course Level: Basic with no prerequisites
Advanced Preparation Required: None
Solium is registered with the National Association of State Boards of Accountancy (NASBA) as
a sponsor of continuing professional education on the National Registry of CPE Sponsors. State
Boards of Accountancy have final authority on the acceptance of individual courses for CPE Credit.
Complaints regarding registered sponsors may be addressed to the National Registry of CPE
Sponsors, 150 Fourth Avenue North, Suite 700, Nashville, TN 37219-2417. www.nasba.org
Complaint Resolution Procedure for CPE credits:
For more information regarding administrative procedures such as submitting a complaint in regards
to the CPE credits offered for the various educational sessions at this year’s conference, please
contact our Education Services department at education@transcentive.com or 203.944.7300,
extension 330.
August
g
20,, 2013 – 9:00 to 10:10 am
Michael Mauro, Sr. Solutions Specialist, Solium
Joe Purdy, CEP, Director, Platform Education, Solium
Panelists
P
li t
Michael Mauro, Sr. Solutions Specialist
Conference Center Map
Joe
Purdy,
CEP, Di
Director
Education
J P
d CEP
t – Platform
Pl tf
Ed
ti
Synergy 2013 – Philadelphia, PA – August 20, 2013
2
CPE C
Credits
dit
C i i P
f
i
l Ed
i (CPE) C
di are A
il bl !
Continuing
Professional
Education
Credits
Available!
You will receive one (1) CPE credit after attending this session
You must attend the entire session to be eligible
You must sign out at the end of the session to obtain the credit for
this session – sign-out sheets will be available in the back of the
room
Electronic certificates will be emailed to you a few weeks after the
conference with the cumulative number of credits earned
Solium is registered with the National Association of State Boards of
Accountancy (NASBA) as a sponsor of continuing professional education on
the National Registry of CPE Sponsors. Web site: www.nasba.org
4
3
5
Tuesday, August 20, 2013 / 9:00 AM - 10:10 AM / Georgian Room
Agenda
A
d
Hosted
H t d vs. Installed
I t ll d
Introduction to Ad Hoc Reporting
Hosted vs. Installed Transcentive Users
Navigating Ad Hoc Reporting
Demonstrated tasks:
�
�
�
�
�
�
Ad Hoc Reporting was made available to our hosted
clients first with the release of v14.50 into our hosted
production environment in early December 2012
Transcentive is currently devising a plan to roll out Ad
Hoc Reporting to those clients with Transcentive locally
installed
sta ed
Searching reports
Running existing reports
Scheduling a report
Copying a report
Creating a new report
Editing an existing report
4
Introducing….
7
Navigating
Hoc R
Reporting
N i ti Ad H
ti
Landing
g Page
g
When first accessing
Ad Hoc Reporting,
you will see a
“Getting Started” Tab
that has four
instructional videos
to introduce the
power of Ad Hoc
Reporting (Basic
Navigation, Creating
an Ad Hoc Report
Report,
Scheduling a Report
and Tips/Tricks).
Use the left panel to
manage, create, run
and schedule your
ad hoc reports!
..::UNLOCK THE POWER::..
..::UNLOCK�THE�POWER::..
Introduction
I t d ti
Navigating
Hoc R
Reports
N i ti Ad H
t (cont’d)
A new reporting and data extract solution
to complement the Crystal Report engine
g fields you
y
Allows yyou to click-and-drag
want to extract out the system in any
order and format
Data can be extracted into XLS, CSV,
HTML, RTF and PDF file formats
R
t can b
d
d or
Reports
be run on-demand
scheduled to run at a user-defined
frequency via email delivery
Folder Structure
Each user will have access to:
Example Company Name: QA_Company
p User Name: JPURDY
Example
6
8
6
G oba Ad
d Hoc
oc Reports”
epo ts
• “Global
• A read-only folder with
sample reports. Use for
educational purposes.
• “Company
Company Reports
Reports” Folder
• Full access rights to edit,
delete or run reports by
ALL users in your
company that
th t h
have access
to Ad Hoc Reporting menu.
• Personal Folder
• A folder that contains your
user name in the label
• Contains the list of reports
you’ve created for your
eyes-only.
eyes
o y
9
7
Navigating
Hoc R
Reports
N i ti Ad H
t (cont’d)
Task
Existing
Reports
T k #2 – Running
R
i E
i ti R
t
Report’
Highlight report and click on the “Execute
Execute Selected Report
button
Main Functions
• Create New Report
• Search Reports
p
----------------------------------• Edit Report
• Duplicate Report
• Delete Report
• Schedule Report
• Schedule
• Instant Email
• Manage Scheduler
• Execute a Report
• HTML (Preview)
• MS Excel (Save)
• PDF (Save)
• RTF (Save)
• CSV (Save)
10
Task
Reports
T k #1 – Searching
S
hi R
t
13
Task
Existing
Reports
T k #2 – Running
R
i E
i ti R
t (Cont’d)
Report Names and Descriptions will be searched
Some reports may require you to enter data for a
Transcentive defined parameter (e.g., As of Date)
Click�to�Start�Search
Click to Start Search
Click�to�Cancel�Search
Return�to�Full�Report�List
11
Task
Reports
T k #1 – Searching
S
hi R
t (Cont’d)
8
14
Task
Existing
Reports
T k #2 – Running
R
i E
i ti R
t (Cont’d)
Some reports may require you to enter data for a filtering
l i that
h you defined
d fi d when
h creating
i the
h report ((e.g.,
selection
grant date range)
Matching reports will be listed with folder information
12
15
9
Task
Existing
Reports
T k #2 – Running
R
i E
i ti R
t (Cont’d)
When a report
generating,
p is done g
g, its resulting
g output
p will
either be opened in a new tab for review (e.g., HTML, PDF)
or you will be prompted to save the file to your local
machine for later review (e
(e.g.,
XLS, CSV)
g XLS
Task
T k #3 – Scheduling
S h d li Reports
R
t (Cont’d)
Compose
the static text that will appear
in the email when the
p
pp
scheduled report is delivered. Make sure to be clear in the email why
they are receiving this message and what they are getting.
Include your name in
the contents of the
email so they know
who it is coming from
The “from”
from email
address will be a
solium.com address
16
Task
S h d li Reports
R
t
19
Task
S h d li Reports
R
t (Cont’d)
You can setup
p a report
p to run automaticallyy for you
y with a pre-defined
p
set
of static or dynamic filtering elements and have it delivered via email to
any email address(es) you wish. This file can be optionally password
p
protected.
You can manage
to alter or cancel them.
g yyour scheduled reports
p
You can also see their last run date, next run date and current status.
SSchedule�a�
h d l
Report
Manage�
Scheduled�
Reports
17
Task
S h d li Reports
R
t (Cont’d)
20
Task
aN
New Report
T k #4 – Creating
C
ti
R
t
When adding
provide it a name for later
g a new scheduled report
p event, p
reference (e.g., cancel the delivery). Pick your export type (e.g., Excel)
and, if possible with the export type selection, define a password.
Easyy as….1…2…3
Times are expressed in
UTC-5 Eastern Time
Can be one time delivery or
reoccurring
Passwords are recommended
10
18
21
11
Task
New R
Reportt (Cont’d)
T k #4 – Creating
C ti a N
Task
New R
Reportt (Cont’d)
T k #4 – Creating
C ti a N
New Report Wizard for Basic Ad Hoc Extract
Select the “Categories”
Categories to use on your report
View Fields
22
Task
New R
Reportt (Cont’d)
T k #4 – Creating
C ti a N
25
Task
New R
Reportt (Cont’d)
T k #4 – Creating
C ti a N
Define report name and folder destination
Optional: Define Sorting Criteria
Should�this�report�be�fully�
open�for�view/edit/run�by�all�
users�with�access�to�Ad�Hoc�
Reporting,�or�just�you?
23
Task
New R
Reportt (Cont’d)
T k #4 – Creating
C ti a N
12
26
Task
New R
Reportt (Cont’d)
T k #4 – Creating
C ti a N
Define report name and folder destination
Optional: Define Filtering Criteria (Static or Dynamic)
24
27
13
Task
New R
Reportt (Cont’d)
T k #4 – Creating
C ti a N
Task
Reportt (Cont’d)
T k #5 – Copying
C
i an Existing
E i ti R
The new report will require a unique name and/or
placement into a different folder
Filters Tab (Cont’d)
(C t’d)
For each selected filtering field
define:
Operator (e.g. less than)
Filtering Value:
• Type in a value manually
• Select from Dropdown
p
of unique
q
on file selections
• Dates: Pick date off calendar
• Dates: Click ‘fx’ button to select
dynamically set dates based upon
the run date of the report.
Prompt for Value (at Run)
Group with Next Filter
AND vs. OR Logic
Summary showing full filtering
logic defined.
28
Task
New R
Reportt (Cont’d)
T k #4 – Creating
C ti a N
Highlight the report you wish to view or alter and click on
h “Edi
d the
h R
i
ill
the
“Edit”” b
button. Th
The report and
Report D
Designer
will
open in a new tab.
29
Task
Reportt
T k #5 – Copying
C
i an Existing
E i ti R
14
32
Task
T k #6 – Editing
Editi an Existing
E i ti Report
R
t (Cont’d)
You can make a duplicate copy of an existing report for
various reasons. Examples: Duplicate to another folder,
create alternative version.
31
Task
T k #6 – Editing
Editi an Existing
E i ti Report
R
t
Pick fields to display
display, grouping & group function
30
The Report Designer will look and act like a spreadsheet
spreadsheet. Use the
expand/collapse buttons to make more room on the screen.
33
15
Task
T k #6 – Editing
Editi an Existing
E i ti Report
R
t (Cont’d)
You can have multiple reports open at the same time,
each on a unique tab. Note the icon on each tab for
preview vs. designer.
Task
T k #6 – Editing
Editi an Existing
E i ti Report
R
t (Cont’d)
Create another new report.
p
Cell Properties - Allows you to define font and field format (e.g. date layout)
g
g Cells – Like in MS Excel allow y
you to create multi-column headers.
Merge/Un-Merge
Word Wrap
Insert an Image (e.g., company logo, signature)
Insert a Function (very much like MS Excel)
Suppress Duplicate Information (e.g., only show optionee data once for series of grants)
Insert a Chart/Graph using a Wizard
Create a link between two reports (e.g., drill-down ability, only available for HTML preview)
34
Task
T k #6 – Editing
Editi an Existing
E i ti Report
R
t (Cont’d)
Key features in the Report Designer toolbar
37
Task
T k #6 – Editing
Editi an Existing
E i ti Report
R
t (Cont’d)
Key “clickable”
clickable areas! (Left-Click Only)
35
Task
T k #6 – Editing
Editi an Existing
E i ti Report
R
t (Cont’d)
38
Task
T k #6 – Editing
Editi an Existing
E i ti Report
R
t (Cont’d)
added removed and resized
Columns can be added,
Key features in the Report Designer toolbar!
Options: Allows you to change display options of
outputted report. Universal settings and some specific
t diff
to
differentt output
t t fformats
t ((e.g., E
Excel).
l) S
Settings
tti
include: Paper Size, Paper Orientation, Default Output
Format Type, Inclusion of Filtering/Sorting Selections
and more!
Template: Map an Ad Hoc Report to a template-based
file/form (e.g., PDF)
Advanced: Change join logic between categories. For
example, Optionee Data and Grant Data together will
only return optionees with grants. This can be changed
so all optionees (even without grants) will be returned
returned.
16
36
39
17
Task
T k #6 – Editing
Editi an Existing
E i ti Report
R
t (Cont’d)
Task
Existing
T k #6 – Editing
Editi an E
i ti Report
R
t (Cont’d)
Rows can be added, removed, resized, hidden or define
a page break after the line is displayed/printed
Double-click on a field to edit its contents. You can enter static
text or type in a formula. Like Microsoft Excel, all formulas begin
with a equal (=) symbol.
Use the ‘fx’ (Formula Editor) button in the toolbar to obtain
guidance on available functions and insertable fields.
40
Task
T k #6 – Editing
Editi an Existing
E i ti Report
R
t (Cont’d)
43
Task
Existing
T k #6 – Editing
Editi an E
i ti Report
R
t (Cont’d)
Sections can be added to create groupings, page/report
h d
i
l b
d or
headers
or ffooters. S
Sections
can also
be moved
shaded.
Use the Format Cells button (
) to define the look of a
numerical value (e.g., share or currency), a date field or use it to
define
f
borders and colors.
41
44
Now….
Go Ad Hoc!
N
G
H !
Task
Existing
T k #6 – Editing
Editi an E
i ti Report
R
t (Cont’d)
When fields from a category are put on a report,
report it will have a color-coded
color coded tick mark in the
upper-right corner of the cell to indicate it is a field and the source category. No color tick
mark, no equal system…. It is a static text field (label).
18
42
45
19
Performance Plans: Using Transcentive Express to Manage Your Complex Performance Plans
Performance Plans: Using Transcentive Express to Manage Your Complex
Performance Plans
Questions?
Q
ti
?
Performance Plans: Using Transcentive Express to
Manage Your Complex Performance Plans
August
g
20,, 2013 – 10:25 to 11:35 am
46
Contact
Us
C t tU
J Purdy,
P d CEP
Joe
Director, Platform Education
Solium
Phone:
203.447.5843
Ph
203 447 5843
joe.purdy@solium.com
Erin Herlihy, CEP, Product Manager, Solium
Craig Malan, Solution Specialist, Solium
CPE C
Credits
dit
Continuing
g Professional Education ((CPE)) Credits are Available!
room
Mi h l M
Michael
Mauro
Sr. Solutions Specialist
Solium
Phone:
203.447.5875
Ph
203 447 5875
michael.mauro@solium.com
Transcentive Support Services
Phone: 1.866.396.7867
support@transcentive.com
suppo t@t a sce t e co
47
2
Agenda
A
d
Setting-up
Setting
up your grants
�
�
�
�
Plan parameters
g
p
period
Vesting/Service
Variable vs. fixed grants
Types of conditions
Prepping your grant for expensing
� Valuing and accounting for your grants
� Open vs. Closed Models
� Probability vs. Fixed Accounting
� Forfeiture
F f it
estimates
ti t and
d performance
f
grants
t
� Performance vesting
20
3
21
Performance Plans: Using Transcentive Express to Manager Your Complex Performance Plans
Agenda
A
d (cont.)
(
t)
Setting-up
your Grants
S tti
G
t
Reporting on your grants
Vesting/Service period
� Explicit
� Annual statistics
� EPS dilutions
� Proxy reporting
� A condition has a predetermined timeframe to be achieved
� Stated in the terms of the grant
� Implicit
Common pitfalls
� Often tied to grants with conditions that impact the timing of
vesting
� Inferred in the terms of the grant
� “All or Nothing” grants
� Terminations and market conditions
� Grants with both market and performance conditions
� Derived
� Commonly seen in conjunction with market-based conditions
� Often calculated from the same valuation techniques used in
determining the Fair Value for expensing purposes (i.e.,
M t C
Monte
Carlo)
l )
� Also tied to grants with conditions that impact the timing of
vesting
Questions
Appendix – additional materials
4
Setting-up
your Grants
S tti
G
t
7
Setting-up
your Grants
S tti
G
t
Plan parameters - PSA
Vesting/Service period
5
Setting-up
your Grants
S tti
G
t
8
Setting-up
your Grants
S tti
G
t
Plan parameters - PSU
Variable vs. fixed grants
� Variable grants can pay out a number of shares other than
target
� Variable flag must be selected upon grant issuance
� Variable grants must be allowed in plan parameters
� A minimum and maximum percent must be established
� They must fall within plan parameters settings
� Target shares issued must fall within the minimum and
maximum share range issued
� Shares cannot be lapsed until a payout is processed
� A payout can be processed before or after shares vest
� Shares must also be vested in order to process a lapse
22
6
9
23
Setting-up
your Grants
S tti
G
t
Setting-up
your Grants
S tti
G
t
Variable vs. fixed grants (cont.)
Types of conditions
� Market conditions
� Typically based on or related to stock price
� Can also be based on a market variable
� e.g., TSR or EPS
� Performance
P f
(non-market)
(
k t) conditions
diti
� A condition which does not have a price or market component
� Could be company-wide
company wide or department-specific
department specific
� Company earnings
� Successful completion of a project
� A single grant may have a performance or market condition
AND a service condition
� Both conditions must be satisfied for a maximum payout
10
Setting-up
your Grants
S tti
G
t
13
Setting-up
your Grants
S tti
G
t
Examples of market conditions
� Fixed grants are always paid out at target
� Variable flag is deselected upon the grant
� Fixed grants can be issued from a plan that allows for variable
grants in plan parameters
� No need for minimum or maximum shares
� No need to process a payout in order to lapse shares
Source:��GPS:�Performance�Awards,�CEPI,�2010
� Shares still must be vested in order to process a lapse
11
Setting-up
your Grants
S tti
G
t
14
Setting-up
your Grants
S tti
G
t
Examples of performance conditions
24
12
15
25
Setting-up
your Grants
S tti
G
t
Prepping
Expensing
P
i your Grants
G
t for
f E
i
Examples of performance conditions (cont.)
Source: GPS: Performance Awards CEPI 2010
16
Prepping
Expensing
P
i your Grants
G
t for
f E
i
Valuing and accounting for your grants
� Probability Accounting vs. Open Model Valuation
� Market Conditions
� Analyze the conditions tied to the grant
� Open-model valuations
� Complex model that takes the probability of each possible
payout into consideration
� e.g., Monte Carlo Simulation
� Performance conditions
� Closed-model valuations
� e.g., Black-Scholes, CRR, Hull-White, Intrinsic Value
� These can be calculated by the system or inputted as “User
Defined” records
� Fixed accounting
� Probability accounting
� Expense based on the number of shares expected to be paid out
� This estimate is likely changing on a monthly,
monthly quarterly or annual
basis
� Expense is trued-up and adjusted moving forward each time the
Expense Probability Factor is updated
17
Prepping
Expensing
P
i your Grants
G
t for
f E
i
20
� System anticipates an external calculation to be completed
and entered
� For grants with market conditions, using a valuation
calculation method other than “User Defined” results in an
error
� Final true-up upon payout
� Expense all shares that are ultimately paid out
� Adjust up or down, based on difference between the payout and
latest Expense Probability Factor estimate
� May be a combination of forfeiture and true-up to vest
� No true-up upon payout,
y
regardless
g
of whether the payout
y
was greater than or less than 100% of target
� This ensures the probability of any given payout is not
accounted for twice
Valuations in Transcentive Express
� Performance conditions (cont.)
26
� Always expense at 100% of target/granted
� Probability of a higher or lower payout is already accounted for
in your valuation
Prepping
Expensing
P
i your Grants
G
t for
f E
i
Valuing and Accounting for your Grants
19
Prepping
Expensing
P
i your Grants
G
t for
f E
i
Valuing and accounting for your grants
18
21
27
Prepping
Expensing
P
i your Grants
G
t for
f E
i
Reporting
Grants
R
ti on your G
t
Probability accounting in Transcentive Express
Annual statistics
� Probability accounting is required for variable grants with
market conditions for EPS calculation purposes
� For grants with market conditions, probability schedule
assignments with expense probability factors other than
100% will be ignored
22
Prepping
Expensing
P
i your Grants
G
t for
f E
i
Reporting
Grants
R
ti on your G
t
Forfeiture estimates and performance grants
Annual statistics
� Unvested cancellations of variable awards due to
termination are still forfeitures
Report
� You should apply an expected forfeiture rate as a “haircut” to
your expense
� True-ups occur upon vesting or forfeiture (at forfeiture or
vest, based on your report settings); Terminations are
covered later in this presentation
Annual Statistics
Market�vs.�
Performance�
Condition(s)
Payout��
Applied
N/A
No
• Total�Shares�Allocated:��Maximum�%�x�Target
• Unearned�Shares:��Portion�of�Target�Shares�
Cancelled x Maximum %
Cancelled�x�Maximum�%
Yes
• Total�Shares�Allocated:��Maximum�%�x�Target
• Unearned�Shares:��Maximum�Shares�– Greater�of�
[ g
[Target�Shares�or�Attained�Shares]
]
� Market vs. performance conditions tied to grant have no
bearing
25
23
Prepping
Expensing
P
i your Grants
G
t for
f E
i
Number�of�Shares
26
Reporting
Grants
R
ti on your G
t
EPS Dilutions
Performance-related
Performance
related vesting
� Acceleration of shares on a specific date results in an
acceleration adjustment
� The service period cannot be extended after expensing
has started
� Ch
Changes tto the
th vesting
ti and
d or amortization
ti ti schedules
h d l will
ill
usually result in re-stating some or all previously-stated
expense
� Expense can be accelerated ON your new vest date once
that date has come to pass
I
Important!:
t t! Don’t
D ’t forget
f
t to
t attach
tt h th
the probability
b bilit schedule
h d l tto th
the award!
d!
28
24
27
29
Reporting
Grants
R
ti on your G
t
Reporting
Grants
R
ti on your G
t
EPS Dilutions
Report
EPS�Dilutions
Proxy reporting
Market�vs.�
Performance�
Condition(s)
Payout��
Applied
Report
N/A
No
• Outstanding:��EPS�Probability Factor�x�Target
• Cancelled:��Portion�of�Target�Cancelled��x�EPS�
Probability Factor
Probability�Factor
Yes
• Outstanding:��Shares�Attained
• Exercised:��Exercised�Portion�of�Shares�Attained
• Cancelled:��Cancelled�Portion of�Shares�Attained
Market�vs.�
Performance�
Condition(s)
Payout��
Applied
N/A
No
Stock�Awards�– Unearned�Shares,�Units�or�Other�
Rights�That Have�Not�Vested�(#):��Target�Shares
Y
Yes
St k A
Stock�Awards
d – Shares�or�Units�That�Have�Not�
Sh
U it Th t H
N t
Vested�(#):��Attained�Shares*
Outstanding�Equity�
at�Fiscal�Year�End
*�Displays�only�grants�that�have�been�paid�out�but not�
yet�lapsed
Option Exercises�
and�Stock�Vested
N/A
Beneficial�
Ownership
p
N/A
28
Yes
Shares Attained*
*�Only�grants�that�have�been�both�paid�out�and�lapsed�
Only grants that have been both paid out and lapsed
are�included
N/A
• Target�Shares
• Shares�Attained
31
Reporting
Grants
R
ti on your G
t
Reporting
Grants
R
ti on your G
t
Proxy reporting
Additional share counts, by report
Report�or�
Function
Market�vs.�
Performance�
Condition(s)
Expense
Calculations
Performance
Payout��
Applied
No
Expense�Probability�Factor x�Target
Yes
Shares�Attained
Market
N/A
Target�Shares
Grant�
Agreement
N/A
No
• Both�Target and�Potential�Payout�Range�displayed
• Vesting�based�on�Target�Shares
Disclosure�
Summary
N/A
No
• Granted,�Vested,�Outstanding: Target�Shares
• Exercisable:��Always�0
Yes
• Granted
Granted*,�Vested,�Outstanding,�Exercisable:�Shares�
Vested Outstanding Exercisable: Shares
Attained
*�For�awards�granted�prior�to�the�period�but�paid�out�within�
the period only any shares attained above target are included
the�period,�only�any�shares�attained�above�target�are�included
29
Reporting
Grants
R
ti on your G
t
Common
Pitfalls
C
Pitf ll
Proxy reporting
Report
“All or Nothing”
Nothing grants
Market�vs.�
Performance�
Condition(s)
Payout��
Applied
Summary�
Compensation
Performance
N/A
Aggregate�Grant�Date�Fair�Value�is�based�on:
• Probable�Shares�(Expense�Probability�x�Target)
• Maximum�Shares
Maximum Shares
Grants�of�Plan�
B dA
Based�Awards
d
Performance
N/A
• Minimum,�Maximum�and�Target�are�displayed
• Aggregate�Grant�Date�Fair�Value�is�based�on
A
t G tD t F i V l i b d
Probable�Shares�(Expense�Probability�x�Target)
Market
Market
� Grants that payout at 100% of target, or not at all
� The final payout cannot be somewhere in between
� May have performance or market conditions
� There is no way to apply a 0% payout to a non-variable
performance
f
grant
Target�Shares
These grants must be entered as variable
i
� Mi
Minimum
payoutt = 0%
� Maximum payout = 100%
� Probability schedule would always reflect either 0% or 100%
• Minimum,�Maximum�and�Target�are�displayed
• Aggregate�Grant�Date�Fair�Value�is�based�on
Aggregate Grant Date Fair Value is based on
Target�Shares
30
32
30
33
31
Common
Pitfalls
C
Pitf ll
Common
Pitfalls
C
Pitf ll
Grants with both market and performance conditions
� These grants should be entered as two separate grants
� Valuations
� Market conditions require open-model valuation calculation
� e.g., Monte Carlo simulation
� Performance conditions do not require such complexity
� Expensing
� Grants with market conditions should be subject to fixed
accounting
� Probability of possible payouts is already captured in the
open-model valuations
� Grants with performance conditions should be subject to variable
accounting
� Transcentive Express cannot combine the different treatment
each type of condition requires
34
Common
Pitfalls
C
Pitf ll
37
Questions?
Q
ti
?
35
Common
Pitfalls
C
Pitf ll
38
38
Contact
Us
C t tU
Terminations and market conditions
Ei H
lih CEP
Erin
Herlihy,
Product Manager, Solium
Phone: 203.447.5841
erin.herlihy@solium.com
� Cancellations that are due to terminations – vs. not
meeting one or more market conditions – can result in
forfeited expense
� This is why a forfeiture estimate can be applied even to
performance grants with market conditions
C i M
l
Craig
Malan
Solution Specialist, Solium
Phone: 203.447.5823
craig.malan@solium.com
Transcentive Support
pp Services
Phone: 1.866.396.7867
� If termination occurs prior to one or more vesting dates,
unvested shares will be treated as forfeited
� Expense will be reversed
� On termination date or vest date, depending on report
settings
32
36
39
33
Pitfalls and Misconceptions in Financial Reporting
Appendix
A
di
Performance options
� Options are “performance” grants by nature
� Value increase with stock price
� Is there an additional performance element?
� Performance vesting?
� Variable number of options granted?
� Some clients have issued PSA grants with an exercise
price > $0 for their p
performance options
p
p
� This is only a workaround; there are drawbacks
� Shares must be lapsed vs. exercised
� Grants
G t will
ill appear on reports
t as options
ti
vs. ffull-value
ll l awards
d
� Please contact Support Services if you issue variable
performance awards
August
g
20,, 2013 – 11:35 am to 12:45 p
pm
Terry Adamson, Senior Vice President , Radford
Ruth Doyle, Vice President, Consulting, CompIntelligence
40
Appendix
A
di
CPE Credits
Performance vesting
� Awards vest based on WHEN a performance condition is
achieved
� This impacts the service period used in expense calculations
� The estimate of when vesting will occur may change over
time; for example:
� At the start of Quarter 1, you believe you’ll achieve vesting by
October 15th
th start
t t off Quarter
Q t 2,
2 your revised
i d estimate
ti t is
i to
t achieve
hi
� At the
vesting by December 31st
C ti i P
f
i
l Ed
ti (CPE) Credits
C dit are Available!
A il bl !
Continuing
Professional
Education
g
You must sign out at the end of the session to obtain the credit for this
session – sign-out sheets will be available in the back of the room
� Functionality
y is being
g developed
p to handle changes
g to the
vesting schedule without re-stating previously expensed
periods
Jennifer Baehr, Programs Director, NASPP
41
2
Agenda
Pitf ll and
d misconceptions
i
ti
i financial
fi
i l reporting
ti
Pitfalls
in
� Pitfall 1: Data issues
� Pitfall 2: What changes are you really making?
� Pitfall 3: ESPP modifications
� Pitfall 4: Performance equity with graded vesting
� Pitfall 5: It’s time to learn
� Pitfall 6: Type 1 or Type 3 modifications
� Pitfall 7: Forfeitures/True-Ups
� Pitfall 8: Non-compliant amortization schedules
� Pitfall 9: Empty share pools?
� Pitfall 10: Bad behavior (historically)
34
3
35
Pitalls and Misconceptions in Financial Reporting
Tuesday, August 20, 2013 / 11:35 AM - 12:45 PM / Georgian Room
Pitfall 1: Data Issues
Pitfall 3: ESPP Modifications
Conflicts between participant view and
accounting requirements
Vesting schedule changes
Quarter end grants and terminations
Classification for performance or liability
Data Import errors
Standard ESPP plans are straightforward to
account for (i.e. 6 month purchase and
offering period)
However “Cadillac”
However,
Cadillac ESPP plans are a beast
to account for appropriately!
example overlapping 24
month offering
� For example,
24-month
periods with 4 6-month purchase periods and
reset provisions
4
Pitfall 2: What Changes are you Really Making?
� Employee to non-employee
� Employee coding change (location, dept, etc.)
Special transactions that had to be handled
differently in your software application
5
8
G d d vesting
ti awards
d with
ith performance
f
Graded
conditions require each vesting tranche to be
amortized on their own
Implementing/converting new functionality
Stock splits
Mergers or acquisitions
Repricings or exchanges
Mass lay-offs
Mass grants
36
E h iindividual’s
di id l’ election
l ti tto iincrease
Each
contribution rate during offering period is
considered a modification
When an offering period “resets”, because the
ending price at any purchase period is less than
the beginning price of the offering, then that is a
modification
The challenge of determining an estimated
number of awards purchased for each purchase
period given salary increases and short term
incentives
Pitfall 4: Performance Equity with Graded Vesting
Pitfall 2: What Changes are you Really Making? (cont.)
7
Pitfall 3: ESPP Modifications (cont.)
Post dated transactions
g tax rate,, forfeiture rate))
New information ((e.g.
Deleting vs. modifying transactions
E l
Employee
changes
h
� For most awards, this requires frontloaded
expense accrual where each tranche is amortized
from the grant date
� However, since the service inception date has not
occurred yet for graded performance awards with
independent and pre-defined goals, the expense
recognition looks like straight-line amortization.
See the comparison example on the next slide.
6
9
37
Pitfall 6: Type I vs. Type III Modifications (cont.)
Pitfall 4: Performance Equity with Graded Vest-(cont.)
Expense Recognition for Performance Plans
Type III: Improbable to Probable
Dependent�Goals
Tranche 1
Year 1
Year 2
Year 3
Year 4
Tranche 2
Tranche 3
Tranche 4
Total
52.08%
27.08%
14.58%
g expectations
p
g
� DOES change
about vesting
NOTE: Note�how�the�Grant�
Date�and�the�Service�Inception�
Date�for�each�vesting�tranche�
occurs�on�Year�1.
� i.e., accelerating vesting upon termination
� No original expense recognized
� New expense calculated and recognized
6.25%
Versus
Independent�Pre�Defined�Goals
NOTE: Note�how�the�Service�
Inception�Date�doesn’t�begin�
until�the�beginning�of�that�year.
Tranche 1
Year 1
Year 2
Year 3
Year 4
25.00%
25.00%
25.00%
25.00%
Tranche 2
Tranche 3
Tranche 4
Total
Pitfall 7: Forfeitures / True-Ups
Pitfall 5: It’s Time to Learn
Shares that are cancelled BEFORE vesting
Make friends
p
� Meet with internal departments
to discuss the
financial reporting obligations of the company
Offer to teach the finance department the
software application
Att d ttrainings
i i
d conferences
f
Attend
and
Network with others
11
g expectations
p
y
� Does NOT change
of p
probability
of vesting
� i.e.,, extend exercise term for shares alreadyy
expected to vest
14
Comparing estimated expense to actual
expense and book an adjustment
Timing – will depend on your forfeiture rate
method
� Dynamic vs. Static
� Incremental expense
is added to original
p
g
grant expense
Pitfall 7: Forfeitures / True-Ups (cont.)
Type I: Probable to Probable
38
p
pp
� Expense
credit can be applied
for these
cancelled shares if expense has already been
booked
Terminated employees
Pitfall 6: Type I vs. Type III Modifications
13
Al
t lk with
ith your auditor
dit before
b f
ki
Always
talk
making
any adjustments
12
15
39
Pitfall 8: Non compliant amortization schedules
Pitfall 9: Empty Share Pools (cont.)
ASC 718 requires expensing at least the
number of shares vested in each period
Pure Straight Line amortization may not
comply with this requirement for awards with
front loaded vesting
What are some solutions?
� Immediatelyy modifyy awards to be settled in
equity once shares are available
� Implement a payout cap (such as 400% of
Face Value) to limit the potential
liability/exposure of the company
� Corporate hedging strategies to limit volatility
on the income statement
16
Pitfall 8: Non compliant amortization schedules (cont.)
Example:
g
� 1000 shares granted
� 50% vests in year 1, 25% Years 2&3
� Pure Straight Line would expense 33% each
year
Si
t ll vests
t in
i year 1,
1 this
thi would
ld
� Since
50% actually
be non compliant with FAS rules
17
Pitfall 9: Empty Share Pools
Pitfall 10: Bad Behavior (Historically)
F option
ti valuations,
l ti
i need
d tto
For
companies
determine their best estimate of expected
exercise
behavior
i b
h i
� Historical behavior is generally the starting
point
i t in
i developing
d
l i thi
this
� However, frequently historical awards do not
h
th
i i
d
have
the same provisions
as currentt awards
(i.e. historical awards had 10 year terms and
current awards have 7 year terms
terms, or
historical options had 4 year graded vesting
and current awards have 3 year cliff)
20
Companies should adjust their historical
behavior to reflect for the terms of the new
awards:
� Occurs with options, performance shares, and
restricted awards alike
� This causes liability accounting
� More volatile income statements
40
19
Pitfall 10: Bad Behavior (Historically) – (cont)
Frequently, companies are continuing to
issue cash based awards if they no longer
have shares available in their plan
18
� Truncation Approach –
� Ratio Approach –
Bi
i l Modeling
M d li –
� Binomial
21
41
Retirement Eligibility: Managing These Complex Tax Provisions in Transcentive Express
Contact
Us
C t tU
T
Ad
Terry
Adamson
Partner
Aon Hewitt
Phone: 215.255.1802
tadamson@radford.com
J
if B
h
Jennifer
Baehr
Programs Director
NASPP
Phone:
203.720.3070
Ph
203
720 3070
jbaehr@naspp.com
Ruth Doyle
CompIntelligence
Phone:
o e 203.463.4064
03 63 06
rdoyle@compintelligence.com
Retirement Eligibility: Managing These Complex Tax
Provisions in Transcentive Express
August
g
20,, 2013 – 1:45 to 2:55 p
pm
22
Erin Herlihy, CEP, Product Manager, Solium
Viji Karunakaran, CEP, Product Manager, Solium
Patricia Brown, CEP, Director, Product Management and Quality Assurance, Solium
CPE C
Credits
dit
Continuing Professional Education (CPE) Credits are
Available!
You must sign out at the end of the session to obtain the
credit for this session – sign-out sheets will be available in the
back of the room
Electronic certificates will be emailed to you a few weeks after
the conference with the cumulative number of credits earned
2
Agenda
A
d
Retirement eligibility concepts – a quick overview
� Taxation impact
� Common retirement eligibility provisions
� Managing rules
� Rules editor
� Events - retirement eligibility taxes, terminations
� Financial reporting
� Grant level retirement eligibility date
� Processing retirement eligibility taxes – a whole new look
42
3
43
Tuesday, August 20, 2013 / 1:45 PM - 2:55 PM / Georgian Room
Agenda
A
d (cont’d)
(
t’d)
Taxation
T
ti Impact
I
t
Transcentive Express (Cont’d)
(Cont d)
Participants with this status prior to or on grant date are
immediately subject to taxation
Participants who reach this status during the vesting
period for a grant are subject to taxation when the status
is obtained regardless of whether or not the vesting has
been reached
Restricted stock awards and restricted stock units have
diff
t ttax ttreatment
t
t when
h thi
different
this occurs
� Participant termination and retirement
� User defined tranches i.e. Pro-rations
� Termination and rule example
� Accounting impact
� Existing functionality (pre-v15)
(pre v15)
� New Enhancements
� Reporting Updates
Non financial
� Non-financial
� Financial
� File updates
Q&A
Index
4
Concepts
C
t
7
Taxation
T
ti Impact
I
t
Restricted stock awards
Restricted grants are typically taxable when they are no
longer subject to ‘substantial risk of forfeiture’ under
Section 83 of the Internal Revenue code
� Income tax and FICA due at retirement eligibility
Restricted stock units
� FICA due at retirement eligibility
� FICA payment can be delayed until end of the calendar
year under an ‘Administrative Ease Rule’
� Potentially results in collection of Medicare taxes only as
l
ill b
d outt on S
i lS
it
some employees
will
be maxed
Social
Security
� Withholding shares to pay FICA can cause additional tax
liability
� Typically this occurs when the restrictions lapse on the
vesting dates
� Except plan provisions that have acceleration or continue
to vest provisions upon retirement
Thi results
l in
i no risk
i k off fforfeiture
f i
h h
h d
� This
once they
have reached
this status guaranteeing them these provisions regardless
of future events
� e.g. Termination of service
� Shares accelerated to cover FICA taxes are subject to
income tax (e.g. The Loop)
5
Concepts
C
t
8
Common
Retirement
C
R
ti
t Eligibility
Eli ibilit Provisions
P
i i
Restricted equity instruments only are subject to
retirement eligibility taxation
(
(
), restricted stock units
� (Restricted
stock awards (RSA),
(RSU), performance stock awards (PSA) and performance
stock units (PSU)
� All grant types are subject to accounting implications
Plans vary on retirement eligibility provisions (i.e. rules)
Typically includes a formula or calculated date when the
p
p
g
participant
becomes retirement eligible
Examples:
� Age and years of service
� Rule of 60, Rule of 75
� Holding Periods
� Grant must be ‘held’ for a minimum period of time before the
participant is considered ‘retirement eligible’
� Typically expressed in months and/or years
� Provisions may be combinations
� Age and Years of Service PLUS Holding Periods
44
6
9
45
Manage
Rules
Editor
M
R
l - Rule
R l Edit
Common
Retirement
C
R
ti
t Eligibility
Eli ibilit Provisions
P
i i
Examples – continued
Formula: Pre-defined retirement eligibility date formula
� Acceleration of shares
� All or a portion of outstanding unvested shares accelerate
� Tranche or multiple events on a single grant possible
� ‘A years worth of vesting’ accelerates; 2 tranches accelerate, etc.
� Number of tranches initially then additional tranche per year for
additional years of service
� Continued to vest
Define your own formula to calculate the RE date
Data elements that can be used to define formula are age,
years of service and grant holding period
Use group and ungroup retirement eligibility (taxes and
financials)
� Unvested outstanding shares continue to vest as normal based
on their underlying vesting schedule
� Pro-rated approaches
� Formulas to determine eligible shares
� Typically from grant date to retirement (termination date)
� Based on number of days in period
10
13
Manage
Rules
Editor
M
R
l - Rule
R l Edit
Transcentive
Managing
T
ti Express:
E
M
i Rules
R l
Retirement eligibility (taxes and financials)
Conditions
Filter on the grants that apply this rule
Use group and ungroup to define more complex filter criteria
For
define
F participant
ti i
t tterminations,
i ti
d
fi your retirement
ti
t eligibility
li ibilit
condition
� Taxes
� Calculates RE date
� Calculates eligible shares when processing RE taxes
� Financials
� Calculates RE date for option grants as well
� RE date also used on financial reports
Participant termination
� Check for rules when processing a termination
11
Manage
Rules
M
R
l
14
Manage
Rules
M
R
l - Rules
R l Editor
Edit
Events and actions
Create, modify, view,
or delete a rule
Rules can be
assigned a ‘priority’
Highest priority is
used
Save As/Load Rules
Specify which event to apply
Define what action to take when the event is processed
Select
the action
the eventt
S l t grantt ttypes that
th t will
ill apply
l th
ti ffor th
Pre-defined events
• Retirement eligibility (taxes and financials)
• Participant termination
C t rules
l in
i a
Create
test environment
and
a
d up
upload
oad to
production to
minimize errors
46
12
15
47
Manage
Rules
Actions
M
R
l – Events
E
t and
dA
ti
Calculated
Retirement
C l l t dR
ti
t Eligibility
Eli ibilit Date
D t
Calculated RE date on grant
� Based on rule defined
g and birth date must be p
p
populated
• Age
• Service date or hire date must be populated to calculate
years of service
• Period grant held (optional field)
Calculation impacted when grant and participant data
l
t are modified
difi d
elements
• Applies to changes made using the grant or optionee import
files or corresponding user interfaces
• Grant data elements: grant date, grant codes 1 – 10 etc
• Participant data elements: subsidiary Codes, user fields 1 - 10
16
Manage
Rules
Loading
Rules
M
R
l – Prioritizing
P i iti i and
dL
di R
l
19
Grant
G
t Level
L
l Retirement
R ti
t Eligibility
Eli ibilit Date
D t
Retirement eligibility date is either calculated or user
f
defined
on the grant
Source is ‘Calculated’ or ‘Grant’’
Prioritizing rules
� More than one rule can apply to a plan (& grant type)
� Most beneficial rule should be set to highest priority
� 1 - Highest priorit
priority
Save As / Load Rules
� Different than import and export
� Saved as XML file
� Primarily useful to test in stage environment and load them
to production
� New rules loaded in inactive status
NOTE: At grant issuance RE date is
calculated only if you don’t enter an
RE date at the time of issuance AND
participant does not have an RE date
on record. New field for Grant level
Service Date
17
Rule
Example
R l off 75 E
l
20
Rules
Calculating
Retirement
Eligibility
R l Hierarchy
Hi
h ffor C
l l ti R
ti
t Eli
ibilit Date
D t
Participant
becomes eligible
when age
of
p
g
g PLUS years
y
service >= 75
Grant Level Service Date?
Yes
No
Participant Service Date?
Participant’s
Participant s birth date – 2/20/1953; service date 9/20/1994
Calculated RE Date on grants – 9/20/2011
N
No
• Earliest the grant B1 becomes eligible is 9/20/2011
• Earliest the grant B2 becomes eligible is on the grant date as
grant was issued later
g
48
18
Participant Hire
Date?
Use Service Date
Calculate Years of Service
Y
Yes
No
Grant is NOT eligible for
Retirement Eligibility Taxes
21
49
Processing
Eligibility
P
i Retirement
R ti
t Eli
ibilit Taxes
T
Managing
M
i Rules
R l
Accounting impact
Filter options – Vesting tab
� Calculated retirement eligibility date
� Expensing treatment applies
� No different than optionee-level RE date
� Expense pro-ration not initially offered
� Termination
T
i ti actions
ti
iimpactt
� Upon termination, expense will be accelerated according to
the number of unamortized shares accelerated
� Similarly, expense will be credited according to the number of
unvested (non-RE) shares cancelled
Processing
P
i Retirement
R ti
t Eligibility
Eli ibilit Taxes
T
22
a whole new look
25
Processing
Eligibility
P
i Retirement
R ti
t Eli
ibilit Taxes
T
Filter options – Participant tab
New redesigned user interface
p
g
g
Participant
grants
mayy become eligible
based on rules
Similar to global restricted lapse and lot more…
� Process taxes without viewing
g grants
g
� Shows participant level tax information
� Allows for multiple participant processing
Legacy taxation applies if no rule defined or rule’s
conditions are not met
23
Processing
Eligibility
P
i Retirement
R ti
t Eli
ibilit Taxes
T
50
26
Processing
Eligibility
P
i Retirement
R ti
t Eli
ibilit Taxes
T
Filter options – Grant tab
Filter options – General tab
� By default all eligible grants are selected
� Filter on grant date range or grant IDs
24
27
51
Rule
Example
R l off 75 E
l - Taxation
T
ti
Processing Retirement Eligibility Taxes -Select Grant Tax Events
Participant becomes eligible for retirement when age
PLUS years of service >= 75
g
� On retirement - accelerate 12 months ((worth)) of vesting
Participant continues to provide his/her services and
does not retire
12 months worth of vesting is now eligible
These shares are no longer at a substantial risk of
forfeiture
Shares are eligible for retirement eligibility taxation upon
their eligibility date
Grant
G
may now have multiple retirement eligibility tax
events
Displays participant grants with retirement eligibility tax events.
A grant may display more than once if there are more than one retirement eligibility
tax events
Warnings and errors will be displayed with informative icons
Grants with missing FMVs have a new way of updating the fair market value
Select the tax date that is missing the FMV
Apply to selected tax date or to all tax dates.
Shares�first�
become�eligible
b
li ibl
• Tax eligibility
g
y dates
28
Processing Retirement Eligibility Taxes -Individual Participant View
View individual participant grants – update fees, taxes
Apply overrides on the participant grants
Rule
Example
R l off 75 E
l – Taxation
T
ti (Cont’d)
(C t’d)
Participant’s
Participant
s birth date – 2/20/1953; service date 9/20/1994
g
y date: 9/20/2011
Calculated retirement eligibility
Grant date: 1/1/2010; shares issued: 100; vesting: 25%
over 4 yrs
�
�
�
�
1/1/2011 – 25
1/1/2012 – 25
1/1/2013 – 25
1/1/2014 - 25
RE tax events
29
Process retirement eligibility results
Total number of records, total inserted, failed etc
Print reports and/or extracts
Added retirement eligibility tax report/extract to the
summary page
Log details includes –
Optionee ID
Grant ID
Rule ID
Tax Eligibility Date
Tax Date
Message
g
52
Tax�Eligibility�Date
Shares�Eligible
Vesting�Tranche�
9/20/2011
25
1/1/2012
1/1/2012
25
1/1/2013
1/1/2013
25
1/1/2014
32
Participant
P ti i
t Termination
T
i ti Comparison
C
i
Processing Retirement Eligibility Taxes -Print Preview and Log
31
30
Version 14 50 and Earlier
Version�14.50�and�Earlier
Version 15.00
15 00 and Greater
Menu - Terminate an optionee
Menu - terminate participant
Terminate an optionee with termination
reason supplied
- The termination schedule is applied
- You
Y can override
id th
the ttermination
i ti
schedule
Terminate participant with termination
reason supplied
- System checks if rule is defined for the
grants
t ((grantt type
t
and
d plan)
l ) ffor th
the
participant and conditions are satisfied
- If yes, then the rule’s actions are
applied
pp
- If no, the legacy termination schedule
functionality is applied
- You can override the rule or
termination schedule that got applied
33
53
Participant
P ti i
t Termination
T
i ti Comparison
C
i
Rule
R l off 75 – Termination
T
i ti Example
E
l
Pro-rated accelerations based on rules
� Rule defined with participant termination event and “tax user
defined tranches” as an action
� For the plan and grant type
� Conditions for the rule are satisfied
� Only displays when there are unvested outstanding
shares/units to be accelerated on termination date
Participant becomes eligible when age PLUS years of
service >= 75
� On retirement - accelerate 12 months (worth) of vesting
Participant
s birth date – 2/20/1953; service date Participant’s
9/20/1994
Grant date: 1/1/2011; shares issued: 100; RE date:
9/20/2011
� Vests: 25% on grant anniversary
�
�
�
�
1/1/2012 – 25
1/1/2013 – 25
1/1/2014 – 25
1/1/2015 - 25
Retirement date: 6/12/2013;
� Shares accelerated: 25 (1/1/2014)
� Remaining
R
i i unvested
t d shares/units
h
/ it cancelled
ll d
34
Participant
P ti i
t Termination
T
i ti Comparison
C
i
37
Accounting
A
ti IImpactt
Participant termination overrides
Expensing treatment
� Serviced based
o longer
o ge subject to risk
s o
o e tu e at RE
� If no
of forfeiture
� Expensed by retirement eligible date
� Cash-settled
� If no longer subject to risk of forfeiture at RE
� Expensed by retirement eligible date
� Mark
Mark-to-Market
cash-settled
to Market accounting is required for any cash
settled
award
All shares covered by retirement eligibility provisions
should be expensed by the RE date
� Expense allocation options of acceleration or accrual
35
Participant
P ti i
t Termination
T
i ti Comparison
C
i
Retirement Eligibility: Managing these Complex Tax Provisions in Transcentive Express
38
Accounting
A
ti IImpactt
Transcentive treats all shares as subject to RE provisions
Participant termination overrides
� No proration
� Expensed by the earliest RE date
Expense allocation options: accrual vs
vs. acceleration
� Accrual
� For each vesting increment, the earlier of the vest date or RE
d t is
date
i used
d as the
th final
fi l expense d
date
t when
h calculating
l l ti shares
h
per day
� This evens out the expense
A
l ti
� Acceleration
� For each vesting increment, the vest date is used as the final
expense date when calculating shares per day
� An
A acceleration
l ti ffor allll unamortized
ti d expense iis ttaken
k on th
the RE
date
� Expense is not as even as under the accrual method
New�columns�on�the�grid.
54
36
39
55
Accounting
A
ti IImpactt
Accounting
A
ti IImpactt
Shares cancelled before the vest date – but on or after
f f
the RE date – are not forfeited
Accrual vs. acceleration
� Unvested cancellations
� Shares have already been expensed; expense is not
credited
Remember: While taxation rules are applicable to full
value awards only,
only retirement eligibility expensing rules
are applicable to all grant types
� Expensing rules are divorced from the taxation rules
altogether
� All shares in a grant a subject to RE expensing treatment,
not just those accelerated to cover taxes
� Provisions may call for proration but Transcentive Express
applies expensing rules to all shares
40
Accounting
A
ti IImpactt
N
ti
New
reporting
� 120 shares with a $5 Fair Value
� Retirement eligible in month 4
� Retirement eligibility tax forecast
Accrual�Method
� Ability to determine future eligibility pool
Acceleration Method
M1
20�Shares
$100
30 Shares
$150
20�Shares
$100
M2
20�Shares
$
$100
30 Shares
$
$150
20�Shares
$
$100
� Grant acceleration history
� Provides details on termination and retirement eligibility
accelerations
l ti
� Rule listing
M3
20�Shares
$100
30 Shares
$150
20�Shares
$100
M4
20 Shares
20�Shares
$100
30 Shares
$150
20�Shares
20
Shares
Adjust:�+40�Shares
$100
Adjust:�+$200
M5
20�Shares
$100
20�Shares
Adjust:��20�Shares
Adjust
20 Shares
$100
Adjust: �$100
Adjust
$100
M6
20�Shares
$100
20�Shares
Adjust:��20�Shares
$100
Adjust:��$100
41
Accounting
A
ti IImpactt
Accrual�Method
M1
20�Shares
$100
30 Shares
$150
20�Shares
20 Sh
20�Shares
$ 00
$100
30 Shares
Sh
$ 0
$150
20 Sh
20�Shares
$ 00
$100
M3
20�Shares
$100
30 Shares
$150
20�Shares
$100
30 Shares
$150
60 Shares
60�Shares
$300
$100
$100
M6
20�Shares
$100
56
Acceleration Method
M2
2
20 Shares
20�Shares
44
� Ability
subject
Abilit to
t determine
d t
i participants
ti i
t who
h will
ill become
b
bj t to
t
retirement eligibility tax events in the future
grant date,, retirement eligibility
g
y date and tax
� Includes g
eligibility date range filtering
� Estimated market price for tax calculations
T titiered
d grouping
i similar
i il tto accounting
ti reports
t
� Two
� Corresponding delimited file extract available from the
p
g dialog
g
reporting
� Accrual provides more even expense
20�Shares
� Includes new delimited file extract
� Retirement eligibility summary
� Retirement eligibility tax forecast
Net results
M5
� Retirement eligibility tax report
New reports
� 120 shares with a $5 fair value
� Retirement eligible in Month 4
M4
� Lists all the rules defined in the system
Updated reports
Reporting
Updates
R
ti U
d t
Accrual vs. acceleration options
Initial Accrual
43
Reporting
Updates
R
ti U
d t
Accrual vs. acceleration options
Initial Accrual
$100
42
45
57
Reporting
Updates
R
ti U
d t
Reporting
Updates
R
ti U
d t
Rule listing
� Allows filtering on events and statuses
� Retirement eligibility (taxes and financials), participant
termination or all events
� Active, inactive or all statuses
� Displays the data elements of the rule including the rule
name, rule ID, rule description, priority, events, grant
retirement eligibility
types,
yp
g
y date formula, status and
conditions
46
Reporting
Updates
R
ti U
d t
49
Reporting
Updates
R
ti U
d t
Grant acceleration history report
� Provides details related to termination and retirement
eligibility acceleration events
� Includes grant date, acceleration date and creation date
range filtering
filt i
� Optional filtering for acceleration type
� Retirement eligibility
� Retirement eligibility taxes
� Participant termination
� Two tiered grouping similar to accounting reports
� Excel friendly export
47
Reporting
Updates
R
ti U
d t
50
Reporting
Updates
R
ti U
d t
Retirement eligibility tax
� Renamed retirement eligibility recap report to retirement
eligibility tax and moved to tax category
� Changed to a stored procedure report
� Provides details related to retirement eligibility tax events
� Includes tax date range and activity/creation date range
filtering (removed RE date filter)
� Two tiered grouping similar to accounting reports
� Data extract available for this report
� Includes additional columns
58
48
51
59
Reporting
Updates
R
ti U
d t
File
Updates
Fil U
d t
Flex file import files
Retirement eligibility tax (cont’d)
� Grant import
New field added - tax eligibility date
Label
L b l changes
h
tto fifields
ld
� New fields added
� Service date
� Termination reason applied
Participant name, participant ID
� Combined with g
grant allocation import
Total taxes due/paid is the SUM of FICA and additional
taxes due/paid for income, if using shares to cover taxes
Total shares withheld for taxes is the total shares withheld
for the transaction (e.g. shares used for FICA and any
additional shares used to cover income taxes). Similar
explanation applies to totals shares sold for taxes
taxes.
� UK CSOP appropriate fields added too!
� Existing fields added
� Taxes paid by shares
� User defined ISO disqualification date
and reason
� Fixed width grant import still available
� Import grants (legacy)
(
)
� Any changes to existing fields on this
import may impact RE date calculation
52
Reporting
Updates
R
ti U
d t
55
File
Updates
Fil U
d t
Retirement eligibility summary
� Provides details related to the plan and grant level settings
� Added
for
Add d new columns
l
f retirement
ti
t eligibility
li ibilit source,
retirement eligibility rule ID, and grant type
� Updated processed yes/no column to latest tax date
� For multiple RE tax events
Flex file import
p files – ((cont’d))
� Optionee import
� New fields added
� Service date
� Termination action (T = terminate, U = undo
Termination, R = rehire, blank or no value +
no termination action
� Existing fields added
� Broker account 2
� Broker code 2
� UK CSOP appropriate fields added too!
Grant reconciliation export
p has new data elements
� Term rule ID
� Retirement eligibility rule ID
� Retirement eligibility date source
� Fixed width optionee import still available
� New and updated fields not added
� Any changes to existing fields on this import may impact RE
date calculation
� Combined with mobility optionee import
53
Reporting
Updates
R
ti U
d t
Retirement eligibility tax
� Flex file import
g y fixed width file no longer
g available
� Legacy
� Retirement eligibility transaction and the taxes are part of
one file
� Import multiple retirement eligibility tax events for a grant
� Import pro-rated retirement eligibility tax events
� No major changes
� Accounting reports continue to expense all shares by the
RE date
� Accrue or accelerate options
� Regardless of proration rules
� Shares cancelled prior to vesting – but on or after the RE
date – are not forfeited
I
t taxes
t
i t specified
ifi d ttranches
h
� Import
against
� Unvested cancellations
� No credit to expense
60
56
File
Updates
Fil U
d t
Accounting reporting
� No interaction with rules
Tax import does not support RE and lapse (RE)
transactions
54
57
61
Questions?
Q
ti
?
Other
Considerations
Oth C
id ti
Performance grants
� Variable grants with guaranteed thresholds (i.e..
y
y are subject
j
Minimum p
payouts
of > 0%)) only
to RE
taxation
� If minimum payout% = 0% then there is still a
continued risk of forfeiture and therefore no taxes are
due when the participant becomes retirement eligible
83(b) elections
� RSA and PSA grant types only
� If election was made within 30 days of grant date
AND all federal state
state, local and FICA taxes were
withheld at that time then no additional taxes are due
on the RE eligibility date
58
58
Contact
Us
C t tU
Ei H
lih CEP
Erin
Herlihy,
Product Manager
Solium
Phone:
203.447.5841
Ph
203 447 5841
erin.herlihy@solium.com
k
CEP
Viji K
Karunakaran,
Product Manager
Solium
Phone:
203.447.5839
Ph
203 447 5839
viji.karunakaran@solium.com
Patricia Brown, CEP
Director, Product Management
Solium
Phone: 203.447.5840
patricia.brown@solium.com
Phone: 1.866.396.7867
suppo
t@t a sce t e co
Correct a termination renamed to undo termination
Renamed ‘Schedule’ to ‘Requested Schedule’
Added field for Applied Schedule
Appendix
A
di
61
Correct
Termination
C
taT
i ti
59
62
62
Tax Payments – RSU – The ‘Loop’
60
63
63
The Inside Scoop: Optimizing Your Experience with Transcentive Express
Retirement
Eligibility
Retirement
R ti
t Eli
ibilit vs. R
ti
t
Retirement�Eligibility
i
li ibili
R ti
Retirement
t
Substantial risk of forfeiture is lost
Participant terminates employment with company
Participant may or may not retire at retirement
eligibility
Certain Taxes are due at Retirement Eligibility
Remainder of the taxes are due at retirement for
the earned shares
- Acceleration of Social Security and
Medicare (“FICA taxes”) for RSU/PSU
- Income taxes for RSU/PSU
- Acceleration of Income taxes and
Employment
E
l
t ttaxes (Social
(S i l Security
S
it and
d Medicare
M di
) for RSA/PSA
- No taxes are due on RSA/PSA at retirement
p Optimizing
p
g Your Experience
p
The Inside Scoop:
with
August
g
20,, 2013 – 2:55 to 4:05 p
pm
64
Michael Mauro, Sr. Solutions Specialist, Solium
Joe Purdy, CEP, Director, Platform Education, Solium
Patricia Brown, CEP, Director, Product Management and Quality Assurance, Solium
CPE C
Credits
dit
C i i P
f
i
l Ed
i (CPE) C
di are A
il bl !
Continuing
Professional
Education
Credits
Available!
room
Solium is registered with the National Association of State Boards of Accountancy
(NASBA) as a sponsor of continuing professional education on the National
Registry of CPE Sponsors. Web site: www.nasba.org
Synergy 2013 – Philadelphia, PA2– August 20, 2013
2
Agenda
A
d
Panelist introductions
Overview of session goals
Poll the Audience
Topics
�
�
�
�
�
�
�
�
Mobility taxation
DTA ending balance report
Non employee accounting
Rules rules
Rules,
rules, rules
Advanced tax elections
Ad hoc reporting
N
New
and
d iimproved!
d!
System log report
Synergy 2013 – Philadelphia, PA3– August 20, 2013
64
3
65
Panelists
P
li t
DTA E
Ending
Balance
Reportt (Cont’d)
di B
l
R
Patricia Brown, CEP
Key�Parameters
Michael
GLF
Mi h l Mauro,
M
• Grant�Date�Range:��Include�all�grants�
up to the end of the current
up�to�the�end�of�the�current�
reporting�period
Joe P
Purdy,
rd CEP
• As�of�Date:�Set�to�the�end�of�the�
reporting�period
• Deferred�Tax�Assets:��Either�apply�
the corporate tax rate assigned to
the�corporate�tax�rate�assigned�to�
each�unique�participant�or�enter�a�
universal�override�percentage
Note:�All�other�settings�should�mirror�
what�you�select�when�running�the�
Compensation�Cost�Accrual�Report.�
Synergy 2013 – Philadelphia, PA 4
– August 20, 2013
4
7
DTA E
Ending
Balance
Reports
di B
l
R
t (Cont’d)
Ch ll
Challenge:
B
Booked
k dE
Expense ffor O
Outstanding
t t di
Challenge: Your tax department is asking for you to
provide them the amount of book expense under
ASC718 has been recognized as it relates to outstanding
options and awards. You do see this as an option on the
p
Cost Accrual Report,
p , how can this
Compensation
number be pulled?
Solution: Run Transcentive’s DTA Ending Balance
Report with an ‘as of date’ equal to the period-end
currently being worked on
Corporate
tax rates are established
p
under Financials > Corporate Tax
Rates
The “default” group applies to anyone
without
ith t a tax
t rate
t code
d assigned.
i
d If a
specific code is assigned the rates
from that code will be applied and is
data sensitive
sensitive.
5
DTA E
Ending
Balance
Reportt
di B
l
R
8
DTA E
Ending
Balance
Reports
di B
l
R
t (Cont’d)
Location: Reporting > Accounting
Purpose:
The
purpose off thi
this reportt iis tto show
the
P
Th primary
i
h
th
balance of the estimated tax benefit for future anticipated
vested transactions that has been accrued to-date. This is
done by taking the ASC 718 compensation cost recognized
and applying against it a corporate tax rate.
The report will show for each employee grant (unless run in
summary mode) the total book expense booked to-date. This would
SC 718 adoption date. All
represent only the amortization post the ASC
pro-forma expense is ignored on this report.
Output Format: This report is available in a legal-landscape
printable version showing only key values
values, or in an export
friendly version with numerous additional columns
of data
66
This total book expense to
to-date
date would represent vested outstanding
shares fully amortized, unvested outstanding and/or transacted
shares partially amortized, amortization for vested transacted shares
fully amortized for awards that provide a tax benefit at “exercise”
exercise
6
9
67
DTA E
Ending
Balance
Reportt (Cont’d)
di B
l
R
DTA E
Ending
Balance
Reportt (Cont’d)
di B
l
R
Additional columns in Excel output version:
“Book�Expense�To�Date”�would�include�expense�from�
unvested�shares�that�could�still�be�reversed�by�way�of�
a�forfeiture�but�the�fair�value�for�the�actual�forfeited�
shares�above�and�beyond�your�estimates�are�adjusted�
by�way�of�a�‘true�up’.��The�DTA�set�aside�each�period�
starts�as�a�percentage�of�this�value�and�accumulates�
each period as new expense is added
each�period�as�new�expense�is�added.�
10
DTA E
Ending
Balance
Reportt (Cont’d)
di B
l
R
�
�
�
�
�
�
�
�
�
�
�
�
Optionee ID
p
name
Optionee
Expiration date
Vesting schedule ID
Shares attained over target (performance)
Unamortized expense (at period end)
Forfeiture % (estimate rate at period end)
Shares repurchase (early exercises)
Repurchasable (at period end)
Unvested shares cancelled (if not counted as a forfeiture)
Vested outstanding
Unvested outstanding
13
DTA E
Ending
Balance
Reportt (Cont’d)
di B
l
R
DTA Ending Balance Report’s “Friends”:
� Compensation Cost Accrual Report
� This
the
Thi reportt will
ill show
h
th amountt off compensation
ti costt
accrued each period with a corporate tax rate applied to
show the new amount of DTA value being added to each
grant’s (or sub-totals’) DTA balance
� APIC Reconciliation Report
� This report will show the detailed vested transactions
showing the comparison between the estimated and actual
tax benefit
� Includes vested exercises/releases and vested cancellations
� Also includes vested ISO disqualifying dispositions
When�vested�transactions�occur�(or�
unvested�transactions�become�vested)�
the estimated tax benefit from these
the�estimated�tax�benefit�from�these�
shares�to�compared�to�the�actual�income�
earned.��When�this�occurs,�their�value�is�
removed�from�the�DTA�balance.�
11
DTA E
Ending
Balance
Reportt (Cont’d)
di B
l
R
14
Challenge: Who & Where Are My Mobile Employees?
Ch ll
P t off your participant
ti i
t base
b
bil
Challenge:
Part
are mobile
employees. You would like to be able to track who those
p
p are and know where theyy are on key-dates
y
people
over
the life of their grants (e.g., vesting, exercise)
Solution: Apply a mobility code to each mobile employee
to not only mark them as mobile but use different code
entries to classify your different type of mobile
employees. Record a mobility assignment record each
time this population moves. The “Mobility By
E
Event
t Type”
T
” reportt will
ill show
h
th
their
i llocation
ti att
each major event over the life of a grant.
Here�is�the�answer�to�your�challenge!��The�
full�outstanding�and�its�specific�amount�of�
booked�expense�recognized�to�date�(fully�
amortized�vested�outstanding�and�typically�
partially�amortized�unvested�
outstanding/transacted).�With�the�current�
rate applied your DTA Balance is shown
rate�applied,�your�DTA�Balance�is�shown.
68
12
15
69
Mobility
M bilit Taxation
T
ti
Mobility
M bilit Taxation
T
ti (Cont’d)
First, setup a list of mobile employee classifications
under Corporate > Mobility Codes. Determine if each
group will have their income spread out over their
assignments by Transcentive or third-party.
16
Mobility
M bilit Taxation
T
ti (Cont’d)
19
Mobility
M bilit Taxation
T
ti (Cont’d)
Assign�the�appropriate�mobility�
to�code�to�each�mobile�
employee�via�the�Add/Modify�
an Optionee screen
an�Optionee�screen.
Example: System calculated breakdown
Establish�their�“Home�Location”��
which�includes�a�country�and�
subdivision.��
bdi i i
Set�their�“Default�Grant�Status”�
to�determine�if�all�grant�records�
entered�on�a�go�forward�basis�
will�be�flagged�as�a�mobile�grant.�
17
Mobility
M bilit Taxation
T
ti (Cont’d)
20
Mobility
M bilit Taxation
T
ti (Cont’d)
Create�an�“Assignment”�record�
to�record�each�movement�the�
mobile�employee�makes.��This�
includes a record for their point
includes�a�record�for�their�point�
of�origin�and�the�timeframe�they�
were�there.
E h i
Each�assignment�record�will�
d ill
contain�the�date�range,�tax�
allocation�data�and�work�
country/subdivision�for�that�
y/
specific�location.�
70
18
21
71
Challenge:
Non
Employee
Accounting
Ch ll
N E
l
A
ti
Non
Employee
Accounting
N E
l
A
ti (Cont’d)
Use the Create/Modify
Use�the�Create/Modify�
Valuation�Tool�to�create�
Mark�to�Market�Valuations
Challenge: Some of your grants are to
p y
q
non-employees
and require
different
accounting treatment
Solution: Apply a non-employee
accounting status to the grant and Markto-Market
to
Market Valuations for each fiscal period
end
22
Non
Employee
Accounting
N E
l
A
ti (Cont’d)
25
Non
Employee
Accounting
N E
l
A
ti (Cont’d)
Non Employee Account Status’�are�established�under�Financials�>�Accounting�Status
Non�Employee�Account�Status
are established under Financials > Accounting Status
L
ti
R
ti > A
ti > CCA
Location:
Reporting
Accounting
Purpose: The primary purpose of this report is to show
period to period compensation expense. For nonemployee accounting you are required to revalue the
award until the settlement date
date. The CCA report
automatically provide the period to period expense
adjustments.
Output Format: This report is available in a legal-landscape
printable version showing only key values, or in an export
f i dl version
friendly
i with
ith numerous additional
dditi
l columns
l
off d
data.
t
Running the additional Adj. Details report will assist with
true-up’s.
true
up s.
23
Non
Employee
Accounting
N E
l
A
ti (Cont’d)
26
Challenge: Multiple Lapses based on Tax Elections
Challenge: Participants are offered a choice for payment
methods to satisfy their tax obligation resulting from the
vesting of restricted shares
shares.
Make�Sure�the�Valuation�Frequency�is�set�
up�correctly�for�your�company!
� Results in processing multiple lapse events for each
payment
p
y
type.
yp ((i.e. cash,, shares withheld,, shares sold))
Found�in�Financials�>�Financial�Parameters
Solution: Use transcentive to track and record advanced
tax elections
� Allows you to run the lapse process once for all payment
elections
l ti
72
24
27
73
Advanced
Ad
d Tax
T Elections
El ti
Advanced
(Cont’d)
Ad
d Tax
T Elections
El ti
Tax payment choices may include cash payments, using
the value of shares withheld or the proceeds of shares
sold
� Define the tax election period where elections can be
p
p
prior to a lapse
p event
accepted
� Defined in Corporate > Plan Parameters > Grant Info
� Elections (AER) record under Tax > Add/Modify Advanced
T El
ti
Tax
Election
Restricted Lapse
Restricted�Lapse
(Tax�Payment�Method�Logic)
1
Enter�Tax�Payment�
O
Override?
id ?
User�Defined�Tax�Payment�
Method Used
Method�Used
2
Advanced�Tax�
El ti
Election�on�File
Fil
Tax�Payment�Method�from�
El ti U d
Election�Used
3
Grant�Level�Default�
on�File
Default�Grant�Tax�Payment�
Method�Used
4
Plan�Level�Default�on�
File
Default�Plan�Tax�Payment�
Method�Used
� Importable too!
5
Cash�Tax�Payment�
Method�Used
Advanced
(Cont’d)
Ad
d Tax
T Elections
El ti
31
Advanced
(Cont’d)
Ad
d Tax
T Elections
El ti
Tax Payment Method Selections
� Tax payment methods allowed under your plan
� Includes default if the participant fails to make an election
� Cash is assumed if no default is selected
Advanced Tax Election Period
� Define the length of ‘election window’
Advanced tax election letter
� Located under the Communications Reporting Category
� Participant letter to choose payment method for taxes due
upon the vesting of restricted and performance grants prior
to vesting
� Advance tax election period defines vesting tranches and
participants
� Define in months and days
Advanced tax election summary
� Located under the Tax/Disposition Reporting Category
� Administrative report summarizing participants and grants
with current tax elections
Advanced
(Cont’d)
Ad
d Tax
T Elections
El ti
Challenge: Calculating Retirement Eligibility Dates
Tax > Add or Modifyy Advanced Tax Elections
� Select participant and grants
� Grants vesting must fall into the ‘open’ election period
� Previous elections appear in election history
� Elections can be modified until the election period
Include�Elections�
end date
defined as ‘allowed’
defined�as�
allowed �
for�the�Plan
74
Challenge: Calculating retirement eligibility dates that are
based on age and years of service combinations (e.g.
Rule of 65)
Solution: Create a rule to calculate the retirement
eligibility dates
75
Manage
Rules
M
R
l
Manage
Rules
M
R
l (Cont’d)
How?
Create a rule to calculate the retirement eligibility date
� General – Create a name, ID and description for the rule
(e.g.
Rule
65, R6
R65 and
Rule
65 b
based
(
R l off 6
dR
l off 6
d on age and
d
years of service)
� Plans – Attach the appropriate plans and g
grant types
y
for
the rule
� Formulas
� Field: age + years of service
� Operator: is greater than or equal to
� Value: 65 year(s) 0 months, 0days
� Conditions – additional filter if desired (e
(e.g.
g Grant Code 1 =
officers)
34
Manage
Rules
M
R
l (Cont’d)
37
Challenge:
Viewing
Multiple
Ch ll
Vi
i M
lti l Participant
P ti i
t Records
R
d
Events and actions
�
�
�
�
Challenge: Reviewing multiple participant records at the
same time
Retirement eligibility (Taxes and Financials)
Select plans and grant types for the event and action
Select action type: (e.g. tax time periods of vesting)
y of vesting
g ((FIFO))
Tax 12 months 0 days
Solution: Access the redesigned grant history for both
participants
NOTE:
Birth
or se
service
on
O
t date, hire
e date o
ce date must
ust be o
file for each participant subject to retirement eligibility
Manage
Rules
M
R
l (Cont’d)
Grant
– New
and
G
t History
Hi t
N
d Improved!
I
d!
Grant history redesigned
� Resizable screens
� Expanded functionality
� New participant search
� Brings up all matches for both name and ID regardless of
sort by selections
� Resizable grants grid
� Grant price added to default view
general financials
� Sub tabs for general,
financials, performance
performance, retirement
eligibility, tax, transactions, user fields and vesting
� Original and current vesting schedule displays
� Content
C t t sensitive
iti help
h l added
dd d
� Modeless- allows you to access grant history multiple
times in the same session
76
36
39
77
Grant
History
– New
and
G
t Hi
t
N
d IImproved!
d! (Cont’d)
Reporting
– New
and
R
ti View
Vi
N
d IImproved!
d! (Cont’d)
40
Challenge:
Where iis th
thatt reportt llocated
Ch ll
Wh
t d again?
i ?
43
Challenge:
Did I Do
Ch ll
D That?
Th t? When?
Wh ?
Challenge: We recently upgraded to a new version of
Transcentive, but we don’t recall when exactly it was
pp
we
done nor do we recall the version of the application
upgraded from?
Challenge: Where is that report located again? What is
that name of the report?
Solution: Access the redesigned reporting shortcut Icon
and search for reports by name or even partial name
Solution: Run the ‘System Log’ report. This report is
located under Reporting > Corporation Reports. This
ill show
h
h upgrades
d were performed,
f
d
reportt will
you when
when database images were imported, when auditing is
enabled when report tables are purged and when
enabled,
any flex-file style imports are performed.
44
System
Log R
Reportt
S t
L
Reporting
View – New
and
R
ti Vi
N
d Improved!
I
d!
New search capabilities
S
hb
ti l name
� Search
by reportt name or even partial
Define the date range of activity that you are looking for
(date and time). Activity will be displayed in ascending
order by date/time unless you check the box asking for
fescending order.
� (I.e. Summary or Sum)
c udes a
da d reports
epo ts e
cept for
o pa
t c pat o
Includes
all sta
standard
except
participation
statistics and mailing labels
Audit reports dynamically display if auditing is enabled
U
User
d
defined
fi d ‘‘gavorites’
it ’
� Indicated by a ‘favorites’ icon
� Reports
default to deselected as favorites
p
Tracks ‘recent’ run reports
Optionally sort reports in alphabetical order regardless of
grouping
Optionally remove default grouping
78
42
45
79
System
Log R
Reportt (Cont’d)
S t
L
Ad H
Hoc R
Reporting
Scheduling
ti & S
h d li (Cont’d)
Define�a�report�
name�and�pick�
a�folder�to�save�
it i Sh ld
it�in.��Should�
this�report�be�
fully�open�for�
view/edit�by�all�
/
y
users�with�
access�to�Ad�
Hoc�Reporting,�
or just you?
or�just�you?
46
Ad H
Hoc R
Reporting
Scheduling
ti & S
h d li (Cont’d)
Challenge: Friday is Termination Reconciliation Day!
Challenge: What is the quickest way that I can notify
myself and others in my team of recently terminated plan
p
p
participants?
Create�a�
detailed�
description�to�
remind�you�and�
i d
d
others�why�the�
report�was�
created�and�
what�is�it�used�
for.
Solution: Create an Ad Hoc Report
p that filters the
participants based upon termination date or last
modification date. Schedule the Ad Hoc Report so it is
d
li
d every F
id with
ith a dynamic
d
i filt
delivered
Friday
filter off 7 d
days
worth of past activity. The scheduled event can be setup
to email each person with a password protected
attachment (e.g., XLS)
49
47
Ad H
Hoc R
Reporting
Scheduling
ti & S
h d li
The�length�of�
The
length of
the�description�
is�unlimited!
50
Ad H
Hoc R
Reporting
Scheduling
ti & S
h d li (Cont’d)
Pick�the�
Categories�and�
their�associated�
fi ld
fields�you�want�
t
on�your�Ad�Hoc�
output.�
In�this�case,�we�
only�need�the�
‘Optionee�Data’�
object.
Note: Ad Hoc Reporting is currently only available to Hosted
Transcentive clients. It is coming soon to an local installation near you!
80
View
Vi
Fi ld
Fields
48
51
81
Ad H
Hoc R
Reporting
Scheduling
ti & S
h d li (Cont’d)
Ad H
Hoc R
Reporting
Scheduling
ti & S
h d li (Cont’d)
Optionally,�
define�how�you�
would�like�to�
see�the�report�
th
t
sorted�on�your�
Ad�Hoc�output.
Once�your�report�
is�created�and�
saved,�you�can�
schedule�it�for�
h d l it f
delivery�on�a�
reoccurring�basis�
( g,
(e.g.,�weekly).
y)
Define�if�sorting�
is�ascending�or�
descending.
Just�like�a�
reoccurring�
meeting in
meeting�in�
Microsoft�
Outlook!
Break�ties�to�
ensure�
consistency!�
52
Ad H
Hoc R
Reporting
Scheduling
ti & S
h d li (Cont’d)
Ad H
Hoc R
Reporting
Scheduling
ti & S
h d li (Cont’d)
Optionally,�
O
i
ll
define�how�you�
would�like�to�
see the report’ss�
see�the�report
data�filtered.
Export�type�can�
be�either�HTML,�
PDF,�CSV,�XLS�or�
RTF.�
RTF
Here�we�are�
filtering�for�
filtering
for
Termination�
Date�using�a�
dynamic�date�
function.�
Only�PDF�and�XLS�
allow�the�file�to�
be�password�
protected!
Ti
Time�is�
i
expressed�in�
ET/NYC/�5�UTC
Today�Minus�7�
Days.
53
Ad H
Hoc R
Reporting
Scheduling
ti & S
h d li (Cont’d)
Once�scheduled,�
the�scheduled�
event can be
event�can�be�
altered�or�even�
halted�at�
anytime.
Select�‘Summary�
Function’�to�
define�how�data�
will be treated in
will�be�treated�in�
a�grand�or�sub�
total.
82
56
Ad H
Hoc R
Reporting
Scheduling
ti & S
h d li (Cont’d)
The�fields�and�
the�order�of�
which�you�want�
th
the�outputted�on�
t tt d
your�Ad�Hoc�
Report.
55
54
57
83
Tuesday, August 20, 2013 / 4:05 - 6:00 PM / Georgian Room
Closing remarks, cocktails and networking
Questions?
Q
ti
?
Synergy 2013 – Philadelphia, PA –58
August 20, 2013
58
Contact
Us
C t tU
Closing remarks
P ti i M
Patricia
M. B
Brown, CEP
Director, Product Management
Solium
Phone:
203.447.5840
Ph
203 447 5840
patricia.brown@solium.com
J Purdy,
P d CEP
Joe
Director, Platform Education
Solium
Phone: 203.447.5843
joe.purdy@solium.com
Tuesday, August 20, 2013 / 4:05 - 4:20 PM / Georgian Room
Michael Mauro
Sr. Solutions Specialist
Solium
Phone: 203.447.5875
michael.mauro@solium.com
Phone: 1.866.396.7867
support@transcentive com
Tuesday, August 20, 2013 / 4:30 - 6:00 PM / Lobby Lounge
84
Cocktails and networking
59
85
Speaker Biographies
Industry Speakers
Terry Adamson
Senior Vice President - Radford, an Aon Hewitt Company
Terry Adamson is a Senior Vice President at Radford and has
over 17 years of consulting experience. As National Practice
Leader for Aon’s employee equity consulting practice, Terry is
involved with all types of equity compensation, including the
valuation and accounting for stock options, performance equity
and ESPPs under ASC Topic 718. Terry has worked extensively
in the design of long-term incentive programs, the valuation
of compensatory arrangements during a change in control
under IRC 280G and sabbatical valuations under Topic 710.
He has recently co-authored articles in the Tax Management
Compensation Planning Journal, Benefits Quarterly,
WorldatWork Journal and The Journal of Employee Ownership
Law and Benefits Review. Terry is a frequent speaker on equity
valuation at conferences, seminars and webcasts. Terry was on
the FASB Round Table on Employee Share Options and is the
Chairman of the Society of Actuaries taskforce on stock option
valuation. Terry is also a Certified Equity Professional (CEP)
and serves on the CEP Curriculum Committee. In 2010, Terry
received the 2010 Individual Achievement award by the NASPP.
Prior to joining Radford, Terry was employed as an actuary
at The Hay Group in New York City. Terry holds a bachelor of
science degree in mathematics from Georgetown University.
Jennifer Baehr
Programs Director - NASPP
Jennifer Baehr is the Programs Director at the NASPP. Her
responsibilities include NASPP memberships and online
education to service providers, overseeing the proposal
assistance program and conference RFP process, and she serves
as the point of contact for conference speakers. Jen started
her career in the industry in 2000. Prior to joining the NASPP
she was the Senior Manager of Product & Industry Relations
at OptionEase where she was responsible for enhancing the
product strategy and offerings. She also worked at Transcentive
in several areas including consulting, training, product strategy
and product management.
Jen has been a speaker at the NASPP Annual Conference, the
CEP Symposium, Transcentive Source Conferences and local
NASPP chapter meetings on financial reporting and other topics.
She holds a bachelor’s degree in accounting from Central
Connecticut State University and graduate degrees in
management and business administration from Albertus
Magnus College. Jen earned her CEP designation in November
2005 and is a volunteer for the Certified Equity Professional
Institute (CEPI), where she serves on the curriculum committee.
Jen is also Public Relations Director for the Connecticut NASPP
Chapter.
86
Ruth Doyle
Vice President, Consulting - CompIntelligence
Ruth Doyle is VP of Consulting with CompIntelligence, where
she supports clients with HR and payroll system integration,
specialized reporting, implementation and data conversions, and
financial reporting implementation and reconciliation. Prior to
joining CompIntelligence, she spent over six years as a Director
with UBS Corporate Employee Financial Services and nine years
as Product Manager with Transcentive, focusing on delivery
of products and services relating to accounting compliance
for share-based compensation under ASC and IFRS standards.
She has spent over 14 years in the industry and is a frequent
speaker and trainer on the intricacies of financial reporting for
equity compensation. Ruth is an active member of the NASPP, is
a Certified Equity Professional (CEP) and a volunteer on the CEP
Certification Council. She holds a bachelor of arts from Sacred
Heart University and an MBA from UMASS Amherst, Isenberg
School of Management.
Staff Speakers
Patricia Brown
Director, Product Management and Quality Assurance - Solium
Patricia Brown is responsible for the product management
team that helps provide overall direction for the Solium
Transcentive suite of products. Patricia has over 20 years of
experience in equity compensation. Prior to joining Solium,
Patricia was the Director of Stock Programs for a large public
healthcare company, where she was responsible for all aspects
of equity compensation. In 2001, Patricia joined the former
Transcentive Outsourcing group as an Account Manager, where
she was responsible for administrator training and relationship
management for a broad array of clients. She also served as
a member of the Financial Reporting Resources Center at
Transcentive, where she helped clients meet their financial
reporting needs.
Patricia is a member of the technical oversight board for the
CEPI’s Restricted Stock and Restricted Stock Units and the
Performance Awards GPS publications. She also is a member
of the CEPI Certification Council as well as a member of the
American Coalition of Stock Plan Administrators sub-committee
on best practices.
Patricia has been a speaker at the NASPP Annual Conference,
NASPP Local Chapter Meetings and Solium events on
administrative issues and other topics. She holds a bachelor of
science in business administration from Sacred Heart University
and is a Certified Equity Professional (CEP) and long standing
member of the NASPP.
David Griffin
Vice President, Product and Technology - Solium
David Griffin joined Solium in 2001 where he has served
in many different management roles including application
development, quality assurance, systems analysis and
most recently product management. David is currently
responsible for the oversight of all functions relating to Solium
Transcentive’s product and technology solutions. Prior to
joining Solium Transcentive David was a Product Manager for
a Fitlinxx, an industry leading provider of wellness applications
and previous to that spent a couple of years as a Management
consultant at PriceWaterhouseCoopers.
David earned a BS in Marketing from the University of
Connecticut.
Erin Herlihy
Product Manager - Solium
Erin Herlihy started at Solium as a Business Analyst specializing
in financial reporting and later joined the Product Management
team in 2010. In addition to representing the Product
Management team on various Solium Transcentive projects, she
has assisted with the development of product training materials
for both the Shareworks and Transcentive applications.
Erin holds a bachelor ‘s degree in economics from Union College
and an MBA from the University of Connecticut. Erin earned her
Certified Equity Professional (CEP) designation in 2009 and is a
member of the NASPP.
James Hocking
Vice President Strategic Accounts - Solium
James Hocking joined Solium in 2005. As Vice President of
Strategic Accounts, he is responsible for overseeing Solium’s
relationships with external brokers, third-party providers and
individual issuing companies. In this role, he works closely with
the product team to facilitate data availability and transfer
among these constituencies.
Prior to joining Solium, James spent eight years in the
healthcare software industry working in both client services
and product management. James earned his Certified Equity
Professional (CEP) designation in 2006 and serves on the CEPI
Advisory Board. He is a member of the NASPP. He received his
bachelor of arts from Marist College and his MBA from the
University of Connecticut.
Viji Karunakaran
Product Manager - Solium
Viji Karunakaran is part of the Product Management Team with
Solium. She has presented in our previous annual conferences.
She is responsible for writing requirement documents for new
enhancements, working with the development and quality
assurance teams to implement new requirements, interacting
with clients and staying on top of trends in the equity
compensation industry. Since joining the company in 2004, Viji
has served as a Consultant, Data Management Team Lead and
Business Analyst. She holds a bachelor’s degree in electronics
and telecommunication engineering. She earned her CEP
designation in 2010 and is a volunteer for the CEPI. She is also a
member of the NASPP, GEO and NCEO.
Patricia Landry
Vice President, Client Operations - Solium
Patricia Landry joined Solium in 2005. She began in support
and services, and as the needs of the company evolved, Patricia
took on additional operations responsibilities. In her current
role, Patricia oversees consulting and implementation, data
management, account management, support services and
production support. The client operations team is responsible
for the day-to-day support and operations for U.S. selfadministration business.
Patricia earned her Certified Equity Professional (CEP)
designation in June 2012, has her bachelor of science in
business administration from Oswego State University of New
York and is currently enrolled in an executive MBA program.
87
Craig Malan
Solutions Specialist - Solium
Craig Malan joined Solium in 2011 as a member of support
services. His day-to-day responsibilities include assisting clients
with the in-house administration of their equity plans on both
the Shareworks and Transcentive platforms.
Craig has a bachelor’s degree in mathematics from the
University of Connecticut.
Michael Mauro
Senior Solutions Specialist - Solium
Michael Mauro started in the sales organization group in 2000
and has held positions with technical support services, strategic
account management, product management and consulting.
Michael spends most of his time working directly with clients
to ensure that Solium solutions allow clients to meet their
complex equity compensation reporting requirements. Michael
frequently consults with clients in the areas of financial
reporting and best practices and on the use of Solium solutions
to effectively manage and report on equity compensation
plans. Michael has been a frequent speaker at Solium events
and local NASPP chapter meetings on financial reporting and
other topics. Michael is working toward his Certified Equity
Professional (CEP) designation and is a member of the NASPP.
Joseph Purdy
Director, Platform Education & Certification - Solium
Joe Purdy has been with Solium for over 13 years serving in
various client service roles including Support Specialist, Plan
Administrator, Training Consultant, and Manager, Financial
Reporting. Joe has recently taken on a new role leading Solium’s
education and certification programs that are offered to internal
staff and clients. Prior to his current role, Joe was a senior
member of the Product Management team for the Transcentive
suite focused on financial reporting, Crystal Reports and leading
the quality assurance team.
Joe has been a speaker at the NASPP Annual Conference, CEPI
Symposium, NASPP Local Chapter Meetings and various Solium
events on administrative and financial reporting topics. He has
also proctored the Certified Equity Professional (CEP) Level 2
study group for the NCEO for that last two years. Joe earned
his bachelor of science degree from Sacred Heart University in
Connecticut, his CEP designation in 2005 and is an officer for
the Connecticut Chapter of the NASPP.
88
Jim Wulforst
President, US - Solium
Jim Wulforst is the newly appointed President of Solium US. Jim
has over 25 years of financial services experience, including an
eleven-year tenure with Fidelity Investments, with seven years
as Senior Vice President of Fidelity’s stock plan services. Jim
comes to Solium from E*Trade Financial Corporate Services Inc.,
where he was President for six years. His extensive knowledge
of the global stock plan environment, client and participant
services, marketing and strategy have allowed him to create
successful partnerships throughout the stock plan industry.
Jim is a graduate of the University of Miami with a degree
in business administration. He is currently a member of the
National Association of Stock Plan Professionals (NASPP) and
the Global Equity Organization (GEO), and holds FINRA Series 7,
24 and 63 licenses.
From private companies
to global enterprises
Solium has an equity plan administration solution to meet your needs
Contact us at solutions@solium.com
Solium headquarters
Suite 1500, 800 – 6 Avenue SW
Calgary, Alberta, Canada T2P 3G3
Phone: 403.515.3910
Fax: 403.515.3919
solium.com
Calgary | Montreal | Toronto | Boston | Mission Viejo | San Francisco | Shelton | Tempe | London | Sydney
© Solium Capital Inc. 2013. All rights reserved. The Solium logo is a trademark of Solium in the U.S. and/or other countries.

Transcentive Client Conference

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