I have worked with startups and major corporations on communicating equity plans. The list includes broad-based plans for open, vibrant cultures and exclusive plans for hierarchical, paternalistic companies. Some of the companies were being acquired, some were doing great, some were in hot water. Some of the employees had PhDs, most did not.
A few things were consistent, though. The project leaders did not really know what they wanted from communication until they saw it. They put a lot of effort into explaining what they wanted, but learned better as the work proceeded. And in most cases, the communications approach changed 180 degrees from the beginning to the end of the project.
Why does this happen so consistently? It's no one's fault, it's just the nature of the beast.
Let's face it, even the various technical specialities involved in the design -- compensation, legal, executive team -- often have a hard time making themselves clear to each other, as you know. And once an equity plan goes live, administrative complexity grows minute by minute, especially if you are a global organization.
How can you get it all across without being dragged down into the kind of weeds that quietly and subtly wrap themselves around your ankles and then move snake-like toward your neck -- at the same time that you are standing in front of the most important people in the company?
Effective employee communications tend to have these characteristics: A call to action, simple sentences and a single narrative. Not one of these is easy to do when it comes to equity plans. Certainly not in the first draft. So start your work with the time and perspective it needs, and plan to refine and edit, edit, edit.
How do you get to a good final draft? Here are a few things I've noticed:
A single narrative is the hardest communication goal to accomplish. Do you want employees to understand how the plan works, or what they need to do on exercise, with the broker, tax advisor, etc.? In other words, are you going to talk mostly about plan details and examples or about exercising and selling? Focus on both equally and your communications become encyclopedic.
In my experience, you won't know what you prefer until you try and fail. Inevitably the first draft is far too detail heavy. Inevitably the first draft isn't what project leader was expecting. Too much of this, too little of that. Not what the employees will understand or pay attention to. No mention of option expiration . . .
So learn from their reactions to the first draft (and your own) and move on iteratively. Never let the attorneys have the last word. Get input from someone outside of compensation on the clarity of the sentences and examples being used. Don't count out your company's communicators. Even if they are new to the technicalities, they can help you simplify sentences, improve visuals, identify the questions employees will have and tell you whether you've answered them.
As for the call to action, I find it to be a struggle every time. Most equity communications seem to be egging on employees to get loads of cash out of the deal, don't you think? Except the purpose of these plans is to inspire employees to pay attention to long-term value creation. If you are not talking with employees about their role in building the company's future, remind me why you've included your company's stock (and all the complications that go with it) in your total compensation package?
Margaret O'Hanlon is founder and Principal of re:Think Consulting. She'll join Ann Bares and Dan Walter of the Compensation Cafe to speak the unspoken -- Everything You Do (in Compensation) Is Communication -- in an upcoming book. Margaret brings deep expertise in compensation, career development and communications to the dialog at the Café. Before founding re:Think Consulting, she was a Principal with Towers Watson. Margaret earned her M.S. and Ed.S. in Instructional Technology at Indiana University, Bloomington. Creative writing is one of her outside passions, along with Masters Swimming.