Outsourcing employee share scheme administration is a route undertaken by more than half of companies, according to a global survey conducted by Buck Consultants and Global Shares.
Of the 318 company representatives that responded to the Global stock plan administration survey, 52% said that they outsource all or part of their employee share plan administration activities. Plans most commonly outsourced are share option plans (88%) and purchase plans (50%). In addition, (58%) of respondents are currently licensing software to assist in the administration of their plan.
Of the companies that chose not to outsource, 59% said this was because they feared they would lose control of their data and 38% were concerned about the cost.
Carine Schneider, chief executive officer of Global Shares, said: “An important factor in effective administration is cost and, for the first time, we have looked at an industry average cost per participant, which should help firms assess their internal practices for cost management.”
Currency conversions showed organisations spend US$189,521 (£95,060) annually on their share plans, while the average operating cost per participant of a share plan is US$25.13 (£12.60).
Almost three-quarters of respondents indicated that their share plans operate in multiple countries, with almost 26% stating that their plans are operational in more than 20 countries.
The companies surveyed have headquarters in Bermuda, China, France, Germany, Ireland, Italy, Switzerland, Taiwan, The Netherlands, UK and US.
- 52% of companies outsource all or part of their employee share scheme administration
- 58% of companies are currently licensing software to assist in the administration of their share plan
- Almost 75% of companies indicate their share plans operate in multiple countries
Source: Global stock plan administration survey, conducted by Buck Consultants and Global Shares