Equity Matters: Equity Without the Headache: Why Public & Private Companies Outsource Stock Plan Administration
Equity compensation is one of the fastest ways to attract and retain talent. Still, it can become an operational and compliance burden as companies scale, approach an IPO, or move deeper into public-company reporting and audit cycles.
In this Navigating Equity Compensation webinar, leaders from Penumbra (NYSE), thredUP (NASDAQ), and Countsy share a practical, experience-based view of outsourcing equity plan administration: what drives the decision, what changes operationally, how audit and segregation-of-duties improve, and what to consider if you’re preparing for an IPO.
If you’re a CFO, Controller, General Counsel, Head of Total Rewards, Head of Equity Compensation, HR leader, or finance operations leader, this is the “what it’s really like” conversation you want before deciding whether to build in-house or outsource.
Learn more about Equity Administration outsourcing →
Key takeaways at a glance
Outsourcing is often chosen ahead of an IPO to reduce internal burden during the highest-stakes period.
Segregation of duties is a major driver, especially for SOX/404-style control environments and audit comfort.
Companies can retain visibility (including reporting access) while reducing day-to-day processing and risk.
Outsourced teams can serve as a “source of truth” for legal and finance reporting (SEC filings, proxies, 10-K support).
Reporting accuracy matters: incorrect report parameters are a common pitfall for internal users.
Year-end compliance items (such as Forms 3921/3922) can create a significant operational load in January.
What “outsourcing stock plan administration” actually means
Outsourcing equity plan administration typically means a specialized third party handles the day-to-day operational execution of your equity program while your internal stakeholders (finance, legal, HR/People, payroll) maintain governance and approvals.
In practice, that can include:
Processing equity events (grants, vesting, terminations, cancellations, exercises)
Maintaining data integrity in your equity platform
Running recurring and ad hoc reports for finance and legal workflows
Supporting ESPP administration and cross-functional coordination (payroll + HR + finance)
Preparing key compliance items and documentation for audit support
Supporting specialized projects (IPO readiness, platform implementation/migration, cleanups)
Important nuance: You can outsource processing while still retaining internal visibility and reporting access—this is a common concern, and the webinar addresses it directly.
Why public companies outsource: segregation of duties + audit readiness
One of the clearest themes in the conversation is how outsourcing can strengthen internal controls and reduce equity-related risk.
Both speakers from public companies describe a familiar scenario:
Internal stakeholders often have read-only access
The outsourced equity admin team is the only group making database updates
This creates a clean, auditable separation between:
those who approve grants and decisions, and
those who execute transactions on the platform
That segregation-of-duties structure can make annual control reviews and audit cycles smoother, especially when auditors and internal audit teams want evidence that equity changes can’t be made by the same individuals who benefit from them.
“Will we lose control?” No, but you do need the right operating model
A common objection is:
“If we outsource, won’t we lose control, reporting access, and responsiveness?”
The webinar surfaces a practical reality:
Companies often still run reports internally when needed
Many teams prefer the outsourced partner to run high-stakes or complex reports, because incorrect report parameters are a frequent source of confusion
Strong communication protocols matter, especially at month-end, quarter-end, and year-end, to confirm systems are fully updated before reporting and closing
A good outsourced setup typically includes:
Defined SLAs / response expectations
A shared inbox or ticketing approach for employee questions
Explicit month/quarter/year-end “data is current” confirmations
A clear “what we answer vs what stays internal” boundary (e.g., employee-specific comp decisions remain with the company)
Equity plan scope: RSUs, PSUs, ESPP, and board grants
Both companies describe “plain vanilla” equity plans in the best way: straightforward and manageable, yet operationally complex at scale.
Common elements covered:
RSUs for new hires, promotions, and refresh grants
PSUs for performance-linked awards
ESPP (often 15% discount, two purchase periods/year, 423 compliant)
Board equity (retainer and annual director grants)
This mix creates ongoing touchpoints across finance, legal, HR, payroll, and (for public companies) SEC reporting schedules.
Employee participation: education matters more than you think
A practical insight from thredUP: ESPP participation can be meaningful even across distributed workforces, including distribution center employees, when education and enablement are designed for different audiences.
Tactics mentioned:
Tailoring messaging to the workforce (not just corporate HQ)
Using local managers to help communicate program basics
Flyers, internal videos, and ongoing education
A shared “stock administration” email channel where most questions are answered quickly
Private companies and IPO readiness: when to outsource
If you’re private and considering an IPO (or any near-term public-company-readiness milestone), the panel strongly recommends outsourcing sooner rather than later.
A practical planning window was discussed:
Engage ~6 months ahead (often cited)
In some cases, 6–9 months provides more buffer for:
platform implementation/migration
cleanup and audit of historical data
building repeatable processes for public-company reporting
transfer agent coordination and share release readiness
The operational reality is that the “public company world” introduces additional parties and workflows (transfer agent, public equity platform administration, new reporting cadence). Starting earlier reduces the odds of a rushed conversion.
January compliance reminder: Forms 3921 and 3922
If you handle ISOs and/or ESPP, January is a busy month for a reason.
The webinar includes a reminder about annual reporting obligations:
Form 3921 (ISO exercises)
Form 3922 (ESPP transfers / first transfers of legal title)
These statements must typically be furnished to employees by the end of January (or the next business day if it falls on a weekend), along with required IRS filings.
If you’re not sure whether you’re meeting these requirements, it’s worth reviewing your process.
Want to simplify equity administration?
If you’re exploring whether to outsource equity plan administration, or want to strengthen controls, improve reporting reliability, and reduce operational load. Countsy supports public and private companies with full or partial outsourcing.
FAQ
What is outsourced equity plan administration?
It’s when a specialized third party manages day-to-day stock plan operations (processing, reporting, platform updates, ESPP support), while your company retains governance and approvals.
Why do companies outsource stock plan administration?
Common reasons include cost-effectiveness, continuity/coverage, IPO-readiness, expertise across platforms, and improved segregation of duties for audit and compliance purposes.
Does outsourcing mean we lose access to reporting?
Not necessarily. Many companies maintain reporting access, but often prefer the outsourced team to run critical reports to avoid parameter errors and ensure accuracy.
When should a private company outsource if planning an IPO?
A standard recommendation is to engage around 6 months before the IPO, with 6–9 months providing additional buffer for cleanup, implementation, and readiness work.
What are Forms 3921 and 3922?
They are required annual statements related to ISO exercises (3921) and ESPP transfers (3922), typically prepared and distributed around January each year.
Highlights and jump links
Use these jump links to watch the most relevant parts of the webinar. Each link opens the YouTube video at the exact moment.
00:00 — Session intro + who’s speaking
01:45 — Penumbra overview + equity plan basics (RSUs, PSUs, ESPP)
03:28 — thredUP overview + plan setup (public company stock plan operations)
04:17 — What Countsy does in outsourced equity administration
05:09 — Why outsource: IPO readiness, cost, scale, and controls
07:44 — Segregation of duties + audit/internal controls benefits
11:37 — ESPP design + Penumbra’s international “rebate” approach
13:28 — thredUP equity scope + board equity + cross-functional coordination
15:17 — Driving employee participation + equity education at scale
19:29 — “If I’m considering outsourcing, what should I evaluate?”
22:10 — Report accuracy + how to trust the data
24:21 — Legal perspective: SEC filings, proxies, 10-K backup
26:14 — Forfeiture rate analysis + expensing workflow
28:16 — Private companies + IPO timing (6–9 months ahead)
30:59 — January compliance reminder: Forms 3921 & 3922