HUMAN RESOURCE EXECUTIVE CLIENT CASE STUDY

• Client company’s name: Regeneron
• Client headquarters: Tarrytown, NY
• Client’s primary business: Leading biotechnology company
• Challenge we helped solve: E*TRADE Corporate Services (E*TRADE) provided personalized administrative support by designing a solution that helped with outsourcing daily tasks associated with equity compensation administration so Regeneron’s stock plan administrator could focus on larger, more strategic initiatives.

The client

Regeneron is a leading biotechnology company that develops cutting-edge medicines for diseases ranging from blindness-causing eye diseases to asthma to cancer.

Regeneron, a company with more than 8,000 employees and total revenues of nearly $7 billion in 2018, approached E*TRADE because they were having a difficult time managing their equity compensation program with only one person to handle the critically important tasks associated with daily stock option exercises, along with other required responsibilities. Regeneron’s long-term commitment to science and innovation is reflected in their compensation model, which awards equity grants to all employees, typically in the form of stock options. This creates an ownership culture that guides employees to operate for long term success, but also leads to a certain volume of stock option exercises to manage on a regular basis.

The challenge

The main concern facing Regeneron is that their in-house stock plan administration “team” primarily consisted of one stock plan administrator. Aside from creating a tremendous workload for that individual, this state of affairs also increased the company’s risk because it created a single point of failure—the checks and balances that would naturally be in place with a larger administration team didn’t exist.

As a result, what should have been simple, individual tasks often ballooned into huge time commitments for Regeneron’s stock plan administrator. As an example, it was not uncommon to need several hours to process all the stock option exercises for a given day as it was being done by one individual–something E*TRADE could do in a fraction of that time with the enhanced functionality through their automated platform. Recognizing their stock plan administration limitations were reaching a point of diminishing returns with only one person as their stock plan “go to”, Regeneron approached E*TRADE to partner on finding a way to help streamline their internal processes.

The solution

After evaluating where Regeneron’s pain points were along with their program strengths, the Regeneron stock plan administration team and E*TRADE brainstormed a variety of scenarios to determine the best course of action.

The primary goal was to drive efficiency in Regeneron’s stock plan administration processes while adhering to two non-negotiables up front:

• Adding headcount to the internal stock plan administration team was not an option for consideration
• The Regeneron accounting / form filing team’s existing form filing model and processes with E*TRADE’s stock plan administration platform (Equity Edge Online®) needed to stay intact

The collaborative effort resulted in a creative solution to this unique situation: the development of a hybrid service model in which E*TRADE would now be responsible for some of the more day-to-day, tactical stock plan administration tasks, and Regeneron would perform the remainder. This in turn would allow the stock plan administrator to be more strategic, available and able to focus on the critical priorities necessary to deliver a successful stock plan benefit program for Regeneron.

The results

By utilizing E*TRADE’s automation expertise and support for the time-sensitive, detail-oriented tasks that one person would struggle to complete in a timely manner, this hybrid approach provided Regeneron with several benefits:

• Time: The stock plan administrator now had more time to focus on other high-priority items.
• Flexibility: The company had the ability to choose which tasks to handle itself, and which to delegate to E*TRADE. Although each team maintained a basic set of responsibilities, at any point Regeneron could ask E*TRADE to take on more tasks, or fewer, depending on the situation. Also, E*TRADE could support ad hoc requests, such as running and sending reports, as needed.
• Improved participant experience: By speeding up processing times, the changes enhanced the plan participant experience and potentially boosted employee satisfaction.
• Risk reduction: The hybrid model decreased risk by eliminating the single point of failure and providing a business continuity plan for Regeneron’s stock plan administrator. Even when the administrator is out, E*TRADE has the knowledge and access to support Regeneron as directed from their team.

Creating and administering a stock plan is not a one-size-fits-all proposition. Different companies have different needs and capacities—some might want or need a complete third-party solution, others may choose to offload only specific tasks. One of the keys to long-term success is making sure the solution matches the company’s existing style and culture. If the plan doesn’t fit, the client is less likely to administer it effectively or efficiently.

Bringing its industry expertise to bear in analyzing Regeneron’s challenges and needs, E*TRADE was able to craft a solution that gave the company the best of both worlds: a hybrid model that allowed the client to leverage E*TRADE’s state-of-the-art automation and stock plan expertise while maintaining control of specific tasks it wanted to keep in-house.

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In connection with stock plan solutions offered by E*TRADE Financial Corporate Services, Inc., E*TRADE Securities LLC provides brokerage services to stock plan participants.

E*TRADE Financial Corporate Services, Inc. and E*TRADE Securities LLC are separate but affiliated companies.