Calculating Stock Balances

As a stock administrator, you must have accurate records of the number of shares that are allocated to your treasury, stock classes, and stock plans. The intricate balance tracking and share allocation functionality of Stock Administration captures online transactions and batch processes and provides reports that you can use for financial disclosure, auditing, and regulatory reporting. When you enter an "As of Date" on the share balance inquiry pages and click the calculator button, you can see the share balances as of the date that you entered.

Once you set up your balance tables, the share accounting is derived in real time off the stock options and stock purchase transaction tables. This enables you to define effective-dated rules for the return of shares to the treasury or stock plans for transactions such as cancellations, expirations, repurchases, swaps, trades, and SAR exercises.

Treasury pool and stock plan funding follow a typical allocation process with each action altering pool and plan balances. A typical allocation flow is:

1. Fund Treasury: A company files an initial registration statement with a regulatory agency, such as the SEC, that lists the number and type of shares allocated to the treasury. Later on, a company may increase the number of shares allocated by filing appropriate documents with the SEC to create a new treasury pool or increase the allocation levels of the current pool.

2. Create Class Pools: Different pools can be created for different types of shares. For example, you may create one class pool for common shares outstanding prior to implementation and another class pool for preferred shares outstanding. The common share pool for a stock ID increases and decreases depending upon stock transactions such as exercises, purchases, swaps, trades, and repurchases.

3. Fund Stock Plans: The Board of Directors or the shareholders approves allocating shares to a stock plan from a designated treasury pool. If you use variable compensation, you can allocate shares from your stock option plan to be used by your variable compensation plan. The variable compensation allocation doesn't affect the plan balance.

4. Process Stock Plan Transactions: After the stock plan allocation, daily transactions affect plan balances. Stock option plan transactions include grants, exercises, cancellations, expirations, repurchases, sales, and releases. Stock purchase plan transactions include purchases and sales.

5. Monitor Treasury and Stock Plan Balances: All these stock plan transactions may affect the treasury pool and stock plan balances, and may affect common shares outstanding. The system needs to accurately record the effects of these transactions and to update share balances.

Use the Stock Treasury Balance page (ST_TREASURY_BAL) to calculate stock treasury balances by running the ST_TRSR_BAL process.

The system reports the shares available for issue based on a specific date, along with other balances. You must first allocate shares on the Stock Treasury Table - General page.

Navigation:

Stock > Review Balances Info > Stock Treasury Balance

This example illustrates the Stock Treasury Balance page.

Use the Stock Class Balance page (STOCK_CLASS_BAL) to calculate stock class balances by running the ST_CLASS_BAL process.

The system reports the class shares outstanding based on a specific date. You must first allocate shares on the Stock Class Table page.

Navigation:

Stock > Review Balances Info > Stock Class Balance

This example illustrates the Stock Class Balance page.

Use the Option Plan - Options Outstanding page (STOCK_PLAN_BAL2) to calculate the Stock Option plan shares available to issue, options outstanding, and shares authorized but unissued based on an as of date.

Navigation:

Stock > Review Balances Info > Option Plan > Options Outstanding

This example illustrates the Option Plan - Options Outstanding page.

Use the Stock Purchase Plan Balance page (STOCK_ESPP_BAL) to calculate a stock purchase plan's balances, including shares available to issue as of a specific date, by running the ST_ESPP_BAL process.

You must first allocate shares to a stock purchase plan on the Stock Plan Table page.

Navigation:

Stock > Review Balances Info > Stock Purchase Plan Balance

This example illustrates the Stock Purchase Plan Balance page.