4 benefits of managing your Employee Benefit Trust using an information management platform

In today’s fiercely competitive job market and amidst the complexities of a globalised business environment, attracting and retaining high-calibre staff poses significant challenges for HR and Rewards & Benefits departments. Setting oneself apart as an employer of choice or aligning employee goals with the company's objectives often presents considerable hurdles. Offering equity compensation awards to employees has emerged as a strategy for addressing these challenges, demonstrating that engaging employees as stakeholders can yield profoundly positive outcomes. 

However, before implementing a new equity compensation scheme or modifying an existing one, several critical factors warrant careful consideration. Selecting the appropriate plan type and devising effective management strategies are paramount. One viable option is establishing an Employee Benefit Trust (EBT). This trust, wherein property like company shares is held on behalf of employees, operates as a discretionary trust managed by a trustee for the beneficiaries—typically, the plan’s participants. Notably, EBTs are not exclusive to public companies; unquoted or private companies can utilise this mechanism to create an internal market for their shares. 

Operating such a scheme may significantly increase the workload for HR and Rewards & Benefits departments. Many companies have found that adopting an information management platform proves immensely beneficial, particularly in tasks like tracking share ownership and managing vesting schedules. 

Eleanor Yip, Head of Trusts Team at Equiom Corporate Services in Hong Kong—a trustee service provider specialising in Employee Benefit Trusts—shared the top 4 considerations administrators should prioritise when researching an information management platform to complement their Employee Benefit Trust:  

1. Digital Transformation for Streamlined EBT Information Management: 

“For administrators, choosing a system that eliminates manual record-keeping is crucial,” says Eleanor.” This simplifies tracking stock holdings, reduces administrative burdens, and minimises the risk of errors.” 

2. Enhancing Employee Experience through Digital Solutions: 

Adopting a platform offering a centralised hub for participants to access and manage their stock options in real-time significantly enhances their engagement and understanding of the awards they receive. 

3. Compliance and Regulatory Support: 

Eleanor highlights the importance of choosing a platform that assists in maintaining compliance, particularly in monitoring insider trading activities and ensuring adherence to legal and regulatory frameworks. Access to robust reporting tools is essential to save time, effort, and mitigate non-compliance risks. 

4. Efficient Stock Trading Solutions: 

Eleanor advises, “Seek a platform offering convenient stock trading solutions that empower participants to make informed decisions regarding their stock options.” Integration with major stock exchanges and direct transaction capabilities can maximise the benefits of stock incentive programs.  

By leveraging an information management platform to oversee their EBT or equity compensation plans, companies can streamline information management, ensure compliance, and provide efficient stock trading solutions. This not only enhances the employee experience but also saves valuable time and resources for the company. As we progress towards a more digitised and interconnected world, leveraging technology platforms becomes pivotal in optimising the administration of employee benefit trusts, benefiting all stakeholders involved. 

Discover how you can start reaping the rewards of equity compensation. Contact Eleanor Yip today.

This article has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. This article cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained within this article without obtaining specific professional advice. Please contact Equiom Group to discuss these matters in the context of your particular circumstance. Equiom Group, its partners, employees, and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this article or for any decision based on it.