The podcast discusses the upcoming adoption of T plus one settlement and its potential effects on stock plan administration. It explores the impact on day-to-day operations and strategic decisions for stock plans. The risks and challenges of transitioning to T+1 settlement are discussed along with the importance of communication and building relationships with business partners. The future of stock plan administration and the influence of T+1 settlement, including technological advancements and faster settlement times, are also explored.
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Quick takeaways
Effective communication and coordination with stakeholders mitigates risks and ensures readiness for the transition to T+1 settlement.
Strategic decisions regarding stock plans should consider the benefits of T+1 settlement and optimize the program administration to leverage the faster settlement and reduced volatility.
Deep dives
Anticipating the Effects of T+1 Adoption
The upcoming transition from T+2 to T+1 settlement is expected to impact day-to-day operations. Planning, coordination, and early conversations with the right stakeholders are crucial to mitigate any unknowns and ensure readiness. Cutting down the settlement time by half will require increased speed and precision in execution.
Strategic Decisions and Stock Plans
The shift to T+1 settlement will affect the strategic decisions made regarding company stock plans. Communicating the benefits of T+1, such as reduced volatility and faster settlement, to employees is vital. There may be discussions about plan design, award types, and overall program administration to optimize the T+1 environment.
Risks and Recommendations for Stock Plan Admins
Transitioning to T+1 settlement comes with potential risks. Plan administrators need to ensure effective communication and coordination with various stakeholders such as brokers, vendors, payroll, and legal teams. Proactive relationship-building and understanding downstream effects are crucial to manage risks and facilitate a smooth transition.
Influence on Future of Stock Plan Administration
The shift to T+1 settlement reflects the ongoing evolution of equity administration. Continuous advancements in technology and increasing demand for speed may lead to further changes, potentially pushing for even faster settlement times. Admins must stay proactive and ready to adapt to future transformations.