Equity Compensation Associate (ECA) and Certified Equity Professional (CEP) Designations
What Does it Mean to Hold an ECA or CEP Designation?
Organizations and individuals use Equity Compensation Associate (ECA) and Certified Equity Professional (CEP) designations as a measurement of basic (ECA Exam), intermediate (Level II), and advanced (Level III) knowledge, skills, and abilities. The Certified Equity Professional Institute (CEPI), at Santa Clara University, is the only certification body for equity compensation professionals.
The CEPI curriculum covers accounting; corporate and securities laws; taxation; and design, analysis and administration, ensuring that CEP designees have achieved a required level of expertise in all of the relevant areas of equity compensation. We offer a Level I competency path with the new Equity Compensation Associate (ECA) Designation, in addition to our Level III competency path for the Certified Equity Professional (CEP) Designation.
The CEPI curriculum is challenging and in-depth. Organizations and individuals use the exams as a measurement of knowledge, skills, and abilities.
- The ECA Exam (basic) teaches the fundamentals in equity compensation. Candidates are introduced to the terminology and are given a basic understanding of policy, procedures and routine transactions.
- In Level II (intermediate), candidates have an understanding of all aspects of plan administration, including roles of internal and external service providers. This includes familiarity with the specific code and regulatory provisions applicable to equity compensation programs and a thorough understanding of certain common equity compensation-related transactions and issues.
- In Level III (advanced), candidates have exposure to various types of multidimensional plans. Candidates are expected to have the ability to identify, analyze, and help resolve complex problems, with particular skills in situations that require an understanding of the interaction among several technical areas.
The core of the curriculum is in the CEP Study Packet's syllabi and detailed reading lists.
The certification requires three exams: basic (ECA Exam), intermediate (Level II), and advanced (Level III). Candidates must take and pass all three exams to be awarded certification. The Level I (ECA Exam) questions tend to be definitional and basic concepts, whereas Level II and Level III questions tend to focus on application and the synthesis of concepts. The examination questions cover a wide range of topics and are developed from the readings outlined by the course syllabi.
The exam itself will be administered via Pearson Vue testing centers on a computer provided at the center, or on a personal computer through ProctorU remote proctoring. Each candidate will be seated in an individualized cube at a computer at a testing center or in a controlled and monitored environment for remote proctoring, where they will see the exam on one side of the screen and the study materials on the other. These are the same PDF texts that are sent to all registered candidates and are searchable via keyword and phrase. Candidates will receive their scores 6 - 8 weeks following the exam.
CEP Exams are offered twice a year—in May and November.
Audience: New professionals
Experience: < 2 years of equity compensation experience
Relationship with internal and external service providers: General knowledge of responsibilities; interaction limited to specific functions
Relationship with equity plans: reactive
Knowledge base: Policies, procedures, and routine transactions
Fundamentals in Equity Compensation (ECA Exam)
- A basic understanding of corporations and the frameworks for corporate governance and finance
- An understanding of why corporations use equity compensation
- The ability to differentiate between types of equity compensation
- A working knowledge of equity compensation terminology
- A familiarity with the basic procedures necessary to effectively administer an equity compensation program
- The ability to read and interpret plan documents
Audience: Experienced stock plan professionals
Experience: Passed Level 1; > 2 years of equity compensation experience
Relationship with internal and external service providers: Understands participation of internal departments and external service providers in administering employee equity compensation plans. May make recommendations to decision makers regarding selection of service providers
Relationship with equity plans: Interactive
Knowledge base: All aspects of plan administration, including roles of internal and external service providers
Intermediate Equity Compensation (Level II)
- A thorough working knowledge of the basic tax, accounting, securities law, and corporate law aspects of equity compensation plans
- A thorough understanding of certain common equity compensation-related transactions and issues
- Familiarity with the specific code and regulatory provisions applicable to equity compensation programs
- Familiarity with global implications of equity compensation plans
Audience: Experienced stock plan professionals with managerial and/or consultative responsibilities
Experience: Passed Level 2; exposure to various types of multidimensional plans
Relationship with internal and external service providers: Serves as liaison between all internal and external constituencies. Decision maker in service provider selection process. Holds service providers accountable. Often serves as consultant.
Relationship with equity plans: Proactive
Knowledge base: A complete understanding of the interrelated responsibilities of all equity compensation knowledge domains
Advanced Equity Compensation (Level III)
- Ability to identify, analyze, and help resolve complex problems, with particular skills in situations that require an understanding of the interaction among several technical areas
- An understanding of special equity compensation transactions and issues, such as issues related to corporate governance
- An understanding of cash-based equity compensation programs, as well as an in-depth understanding of advanced employee stock plan financing methods and certain complex tax and accounting issues
- Advanced understanding of global implications of equity compensation plans
The Core Disciplines of Equity Compensation
1) Corporate and Securities Law
- Effects of resale and registration requirements and exemptions of the Securities Act of 1933 as applied to privately-owned and publicly-held companies
- Securities Exchange Act of 1934 requirements for periodic reporting, proxy solicitation, tender offers, and insider trading
- Characteristics and authority of public and private companies - board of directors, business entities, blue sky laws
Accounting implications to equity compensation of:
- Accounting Standards Codification Topic 718 - ASC 718 (Previously Financial Accountings Standards Board Statement No. 123 Revised "FAS 123R")
- IFRS 2
- Financial Accountings Standards Board Interpretation No. 28 ("FIN28")
Implications of taxation rules surrounding equity compensation plans:
- Internal Revenue Code Nos. 421, 422, 423, 424
- Knowledge of income tax collection and deduction rules applicable to companies and to recipients of equity compensation
4) Equity Plan Design, Analysis, and Administration
- Awareness of the different equity compensation vehicles and requirements
- Knowledge of various processes and procedures to accomplish equity compensation goals
- Understanding of standard and unique equity compensation plan provisions and documents and their effects to recipients and the company
- Insight into shareholder concerns and considerations with respect to equity compensation
Functional Areas and Associated Knowledge
*Note: The CEPI includes experimental items (10% of exam content) on the exams. Experimental items are unscored, unidentified items, and may not adhere to these percentages. Scored items will reflect this weighting.