The Beneficiary Experience Gap in Equity Compensation Plans
Naming a beneficiary sounds like and should be a simple task, and on most brokerage platforms, it is—the user logs in, lists the name or names, sets a percentage, done. But for participants holding unvested restricted stock, unexercised options or active ESPP shares, that simple task splits in two, and only half of it happens online.
Corporate Insight’s latest Workplace Finance Monitor report, Equity Plan Beneficiary Management, looks at how three firms handle this split for their equity plan participants. This research finds a consistent experience gap: every firm offers a straightforward digital path to name beneficiaries for settled brokerage shares but none offer that same path for the unsettled awards that make up the core of an equity plan.
The three firms in this report are anonymized here, but are identified (with screenshots and in-depth reviews of the platforms) in the full report.
Two sets of rules within one interface
Equity compensation plans separate cleanly into two buckets. Settled, vested shares sit in a standard brokerage account and follow ordinary beneficiary designation rules. Unvested RSUs, unexercised options and other plan-governed awards follow whatever the employer’s plan document specifies instead, and those specifics vary by company.
Each firm in this report offers a clean, single beneficiary hub for the brokerage side of that equation. Participants can name up to 10 primary and 10 contingent beneficiaries, split allocations automatically and track their progress through a multi-step flow. But none of the firms extends that flow to plan-governed awards. Designations for those holdings still run through paper forms that employers distribute on their own, outside the site.
This report flags a bigger concern than the absence of a digital option for plan-governed shares. It’s the lack of communication around that absence. None of the three sites tells participants outright which type of designation they are managing, and one firm’s specific account dropdown magnifies the problem: it defaults to a participant’s individual brokerage account without asking, so a participant managing their equity plan overview can click through to beneficiaries and land in a screen that only ever touched their brokerage holdings.
Where the brokerage experience works well
Two firms stand out for making the piece they do offer easy to use. One firm offers a four-step flow that lets participants split assets evenly among beneficiaries with a single toggle and generates a bulleted error list with hyperlinks straight to the field that needs fixing. Another firm offers a running allocation tally that updates as participants enter percentages, as well as a Beneficiaries landing page that flags any account, retail or employer-sponsored, that’s missing a designation entirely.
Both approaches here share a common theme: they reduce the number of decisions a participant has to make correctly on their own. A percentage split doesn’t require mental math, and an error message that links directly to the problem field doesn’t require a second read of the whole form. These are relatively small design choices, but they add up to meaningfully lower abandonment risk on a task most participants would rather not think about at all.
The paperwork problem runs deeper than beneficiaries
None of the three firms in this report offers a centralized hub for plan documentation. Forms, plan summaries and beneficiary paperwork for unvested awards show up scattered across message centers, grant-level document links and company resource pages, depending on the employer.
For one firm, our research found at least one employer relying entirely on the participant site’s Message Center to deliver plan rules and a beneficiary form, bundled into a PDF with a generic subject line. With another firm, plan documents live at the individual grant level on the Holdings page, so a participant would need to already understand that plan-governed awards work differently before knowing to look there. Lastly, one firm’s virtual assistant, when asked directly about equity plan beneficiaries, tells participants to contact their employer. This response is accurate but not something the platform reveals on its own anywhere else.
A model worth borrowing
Retirement plan providers offer a useful comparison point to brokerage firms. Corebridge Financial runs a guided, step-by-step walkthrough of its beneficiary process, complete with an embedded video, directly from the My Beneficiaries page. Voya links out to a disability planning resource hub the moment a participant flags a beneficiary who may receive government benefits, right at the point where that question becomes relevant, instead of buried in a general FAQ.
Equity plan providers don’t need to build a digital designation flow for every possible plan structure to improve on today’s experience. Instead, firms can borrow the retirement industry’s approach to contextual, moment-of-need help, explaining what a designation covers, what happens to different award types at a participant’s death and where the plan-specific rules can be found. These small improvements would go a long way on their own.
Learn more about our Workplace Finance research, and contact us to learn how to access the full suite of workplace finance research, including the Equity Plan Beneficiary Management report.
Ethan Mazursky
Ethan Mazursky is a research associate on Corporate Insight's retirement and workplace finance team.