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Human Resources Expert Expert: Margaret Lobenstine
Outsource your employee stock option plans
Q: I am in Marketing, working for a small company. I have no background in Human Resources or Finance. I have been assigned the task of instituting an employee equity program for the company. All research I have done to date is just confusing to me. Can you recommend a course of action to take. Should I recommend we hire outside help to do this or is there another route I can go?
A: From what you've shared, I believe your company has put the cart before the horse. Employee equity programs are definitely something you, as a Human Resource person, will be able to use on down the road as one of the carrots to attract/hold attractive employees. But setting up such a program up requires the owners to meet first with a trusted business accountant and an attorney who is experienced in setting up full and partial Employee Stock Option Plans (ESOPs). As your research has already shown you, there are many complex factors involved in how this is done, so the lawyer and the accountant should be familiar with the tax laws of the state in which your company is located. This is definitely not something an untrained human resources person, relying only on research, should set up on his own, no matter how small the company.
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