Here’s a quick experiment to run around your company: Send a survey to ask
Here’s a quick experiment to run around your company:
Send a survey to ask about
- Your employees’ first ESOP meeting,
- How they look at ESOPs right now, and
- How well they understand it.
The catch? 7/10 companies will be very disappointed. Why? Let’s go back in time.
Remember when you had that first ESOP meeting with your employees? That meeting also turned out to be the only touchpoint throughout their journey. You also tried to fit in as much information as possible and a lot of it got lost in translation. ESOPs are not easy and have more layers than your employees are ready for.
You need to change how you talk about ESOPs. But more importantly, you need to change when you do it.
Why do ESOP meetings matter?
It might look like a lot of time invested but trust us, your employees will be thankful. You need to constantly educate them about ESOPs in order to avoid confusion on the date of maturity. Keep in mind all the time that effective ESOP communication is not just about the message. The consistency of the message is just as important. If your employee does not know your ESOP plan like the back of their hand, you need to reevaluate the conversations and the management.
We strongly suggest you review your current communications strategy and see if you can add one or more of these touchpoints, if not all.
1. The initial meetings
Build the narrative in this meeting. Don’t start with what your ESOPs are, rather start with how well your employee comprehends the whole concept. Clarify all doubts and explain how your processes help them. Use this first meeting to transfer ownership and build the foundation of your narrative. What you say here matters because the core of this message is the one you need to constantly plug in.
2. Annual ESOP Meetings
Bring in numbers here and lead the story with performance. It is time to celebrate the ESOPs. Remind your employees of how you are working on the initial promise and talk to them about updated stock price, participant statements, and employee benefit level. This annual meeting is also an effective way to continue to remind the employees who own stocks on how ESOP works. Also, it expands the message and brings in new questions. Neewer perspective helps in retention.
3. State of the Company Meetings
These meetings are a roller coaster ride. They can range anywhere from celebrating the growth to discussing some setbacks, and in worse cases, bad news. These meetings have a direct impact on how your employee feels about ESOPs. As the news will directly influence the price and the financial results, you need to be as transparent as possible. Here’s a mantra:
- Talk about actions taken and the impact
- Give numerical info, no matter which direction it went into
- Work on setting expectations
Also, even though it is a common practice to combine status meetings with annual ESOP meetings, we highly advise to steer clear of this practice. Keep them separate and use annual ESOP meetings to clearly focus on the conversation around stocks.
4. Appraisal Meetings
These are a great refresher. As these meetings are personal, they are an effective tool to illustrate the total investment that a company makes in its employee owners. Employees also get a renewed sense of ownership as they can clearly see how much of their stake is at stake. Appraisal meetings are the most important ESOP touch point. They put the conversation around stocks in the front seat and give you an opportunity to showcase the ESOP plan as one of the centerpieces of your benefits package.
And more opportunities
All the above meetings give you a window after an interval. They are important and help you provide multiple touchpoints throughout the year. But there are so many opportunities that can be all about ESOPs and be more frequent.
- ESOP informational materials or brochures
Great way to give employees everything in black and white. You can include a review of the plan’s eligibility, contribution, and vesting rules and how a leveraged ESOP works. Also, use our ESOP glossary to make things easy. You can find it here.
- ESOP training sessions
You can get an expert or a consultant onboard. Conduct a session about ESOPs, the importance of this investment, and how ESOPs evolve. These meetings can be great evaluators of your employee’s trust and belief.
In addition to providing another ESOP touch point to all the employees, townhalls offer other benefits: ESOP education, networking, idea generation, and employee owner camaraderie.
To put it in the simplest terms, what you say matters as much as how often you say it. The problem is not the quantum of information, but the frequency.
You believe that you have told everything about ESOPs and it is all done. Not to blame you, we all never have enough time. But that information overload eventually turns into an incremental challenge for your employees as they progress.
If you would like someone else to take this up and leave room for other pressing matters, you can contact us here. As you know, when it comes to equity, we are all about that Zen!