When acquisitions and employee share plans collide

Equatex’s Head of Business Consulting, Derek Moniz, on what organisations need to consider for their employee share plans when involved in an acquisition

Acquisitions are a complex and delicate process for all those involved, whether part of the company being acquired, or the business carrying out the acquisition. Countless stakeholders are affected by the process, particularly employees who may face changes to their share plans.

Equatex’s Head of Business Consulting, Derek Moniz, explains what businesses need to know about employee share plans when undergoing an acquisition or merger, and why the employee experience is the most important factor of all.

Acquisitions can be very intense for everyone involved, especially because the deals tend to be worth a huge amount of money. At the same time, acquisitions don’t happen every day, and businesses may not be aware of what practical steps they may need to take in terms of employee share plans. Our clients look to us to guide them through this process, and we bring together experts from across Equatex to assist on each stage of the process.


Reassure and communicate with employees

The starting point is deciding what will happen to the plan. Will it exist in the future? How will it change? Our role in the project is dependent on the type of corporate action our clients are involved in, which in turn results in the complexity of the project.

Our key concern is always the impact on the employees; to ensure transparency on the share plans relating to the corporate action. Reassurance and communication are critical. They need to clearly understand what will happen and how it will be reflected on their employee portal. It’s particularly important that they don’t feel as if they have lost out on anything, as these types of events are really not within their control but do have an impact on part of their wealth.

Once employees are informed about what will happen as a result of the acquisition, the process must then be made transparent on the system. For example, if they are to receive cash, this will be shown on the portal; if there are special taxation requirements or liquidation of shares, we need to ensure that the system is easy to understand for the employee. The more transparent we make it, the less questions or concerns filter back to the corporate administrators.

Reassurance and communication are critical. They need to clearly understand what will happen and how it will be reflected on their employee portal.

Consider tax and legal implications

Next, we look at the acquisition from a project perspective, and understand how this process will work alongside other key factors that influence the processing of the event. What are the tax implications? What about legal aspects? If it’s a multinational organisation, how will people in different countries be treated? We need to identify any potential showstoppers right at the start. For example, there may be special US policies that we need to account for.

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The team of experts from each of the departments within Equatex then draws out a plan of how the acquisition should be processed within our system and downstreamed to the external world. This is about understanding custody movements; communicating with treasury departments and other custodians; having the necessary details on the corporate action from our stakeholders; understanding the special conversion ratios for the old to new shares; understanding the cash movements if any; dealing with payrolls across the globe to ensure money moves on time and as expected whether it is us paying out or receiving the large cash amount; and additionally, designing the technical solution in parallel on EquatePlus to execute everything in as automated a process as possible. These are just some of the processes that are looked into when drawing out the detailed plan to successfully execute the corporate action.

Close all the gaps

After analysing these aspects of the project, we then create a project plan in close collaboration with the client. We outline the responsibilities for each of the tasks and ensure that the deliverables are acceptable for all stakeholders involved. In the testing phase, we take the client through each step that an employee would go through. We also outline the entire operational piece, which our dedicated Global Ops team executes and then we go through the runbooks systematically to ensure there are no gaps in the project plan. We then begin preparations for the real event – a stressful and nerve-racking period, yet the in-depth preparations give us comfort that the success of the project is in our control to deliver for our corporate clients.

Nearly every part of the business is involved throughout this process. Our Global Operations team provide us with an abundance of information on the operational process as well as taking care of all the physical custody and cash movements related to the event. In addition, they liaise with our banking partners to keep us informed on the details of the corporate action. IT provides a key supporting arm to ensure that the functionality required is in place and working, system performance is optimal and finally providing support and monitoring of the actual event itself. Legal ensures that we stay within the requirements of our service offering. The Client Relationship team is constantly liaising with our clients and other key stakeholders to ensure the needs of the client are at the forefront of our planning. Last but not least, our team consults the client on the best practices within the industry and advises on how best to use EquatePlus as a tool to clearly communicate to the plan participants.


There will be times you need to make allowances, too. If our client is part of the company being acquired, they may not have all the answers. Acquisitions can be secretive as companies don’t want to share too much information in the take-over period. Clients ask us about our experiences, and how we would approach different scenarios and deal with certain complexities. This is not a process clients go through everyday, whereas we see it more often. It’s really a big team effort; everybody has their own expertise and clients rely on that.

Meeting objectives

We have a number of objectives when we are planning and executing the project. First, we make sure the requirement of the client is met; risk is a major concern and we won’t do anything that incurs any risk to our business and our client’s business. The participant experience is a major factor too; as the provider, we make sure employees see what they are meant to on the platform. The contact centre is also well informed about the situation, and it’s clear to them how to explain things if employees do have any problems.

Acquisitions are unique projects, and require months of planning for us as well as for our clients. It is not a one-person show; it really needs a team effort to deliver the project on time and seamlessly. At the end of the day, the key is making sure that the corporate client is more than satisfied with the service and that the participant experience is as positive as it can be through what can be an extremely challenging and eventful period.


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Communication team at Equatex AG
Equatex provides international employee and executive compensation plan services for today’s global enterprise, supporting clients with participants across Europe, Asia, Australia and America.

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