Client Spotlight

MongoDB: Automating Equity
Tax Calculations

Explore how MongoDB adopted new functionality to streamline their equity plan management processes, boosting efficiency and saving their administration team time and resources.

MongoDB’s mission is to empower innovators to create, transform, and disrupt industries by unleashing the power of software and data. For years, the company has relied on Morgan Stanley at Work’s Equity Edge Online (EEO) platform to administer its share plans. Recently, MongoDB adopted new functionality that streamlined the company’s tax and payroll reporting processes.

Managing Movers Manually

Back in 2020, MongoDB was using a manual process to calculate the equity-related taxes owed by its geographically mobile workforce.

 

When a domestic or international employee moved to a new tax jurisdiction, MongoDB used a formula-driven spreadsheet to calculate the prorated taxable gain of the vested shares under each tax jurisdiction. The stock plan administrator would manually enter the calculated gains and withholdings in EEO, then audit the figures on the spreadsheet against EEO’s taxable income reports for any discrepancies or errors.

 

As long as the company didn’t have too many employees relocating, this process was working well. But when the pandemic hit, hundreds of employees — some with up to six grants each — suddenly began shifting jurisdictions.

Cross-departmental cooperation, and collaboration with Morgan Stanley at Work and KPMG, were critical to the success of this initiative. Our relationship with Morgan Stanley at Work gave us a level of comfort and resulted in an end product fully tailored to our needs.
Dineshni Anumala, Senior Manager, Stock Compensation

Easy Integrations Across Applications

  1. 1
    Phase 1:

    MongoDB decided to implement the KPMG Global Equity Tracker (GET) system to manage their global mobility tax calculations. In March 2021, they kicked off a pilot program. As part of this pilot, MongoDB leveraged standard KPMG templates to input data, which the GET system used to automate the company’s U.S. multi-state reporting and withholding tax calculations.

  2. 2
    Phase 2:

    By July 2021, the system was working so well that MongoDB decided to automate tax calculations for its entire U.S. equity population. To do so, they reached out to KPMG and Morgan Stanley at Work and were informed that an application programming interface (API) already existed between Morgan Stanley and KPMG. Thanks to this API, pre-formatted files could be sent from GET directly, allowing the company to easily settle taxes across jurisdictions. Suddenly, a process that had taken days only took a couple of hours.

  3. 3
    Phase 3:

    Over the next few quarters, MongoDB continued to expand their automation beyond their U.S. and international movers to cover its entire global population of equity holders and stock option participants (including employees who hadn’t relocated). The company even set up a termination from HR to be delivered to the platform automatically which cancels unvested grants when employees leave the company. This approach keeps the system updated.

Helping the Business and its Employees Thrive

With integration that covers trade, share delivery, tax settlement and payroll processes, MongoDB’s stakeholders have realized benefits across the board.

Equity Plan Participants

Equity plan participants and employees can more easily track tax withholdings across all their awards, broken down by tax settlement rate and tax jurisdiction.

Equity Plan Managers

The equity team no longer has to manually identify movers or load taxes into the platform. Instead, all analysis, tax calculations and data entry are automated, freeing up the team to simply review and approve release reports.

Payroll Team

The payroll team replaced its spreadsheet-driven manual entry system with a globally consistent payroll process that allows team members to focus on validation, internal controls and operational efficiency.

Financial Partners

Near real-time reconciliation reporting also allows the finance team to address compensation issues throughout the year, reducing the need for tax report restatements from those provided from KPMG and Morgan Stanley at Work.

 

The Power of Collaboration

Automated award processing, timely settlement and ongoing employee tracking have also enabled MongoDB to vastly streamline its tax and payroll reporting, showcasing the power of collaboration between Morgan Stanley at Work, KPMG and MongoDB.

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This case study is presented for illustrative purposes only. Each client’s situation is different and a client’s experience and any recommendations made to a client will vary depending on the specific facts and circumstances involved. Past performance is no guarantee of future results. These strategies do not guarantee a profit or protect against loss and may not be appropriate for all investors.

Employee stock plan solutions are offered by E*TRADE Financial Corporate Services, Inc., Solium Capital LLC, Solium Plan Managers LLC and Morgan Stanley Smith Barney LLC (“MSSB”), which are part of Morgan Stanley at Work. Morgan Stanley at Work services and stock plan accounts are provided by wholly owned subsidiaries of Morgan Stanley.

Morgan Stanley at Work stock plan accounts were previously referred to as Shareworks, StockPlan Connect or E*TRADE stock plan accounts, as applicable. In connection with stock plan solutions offered by Morgan Stanley at Work, securities products and services are offered by MSSB, Member SIPC. E*TRADE from Morgan Stanley is a registered trademark of MSSB.

All entities are separate but affiliated subsidiaries of Morgan Stanley. The laws, regulations, and rulings addressed by the products, services and publications offered by Morgan Stanley and its affiliates are subject to various interpretations and frequent change. Morgan Stanley and its affiliates do not warrant these products, services, and publications against different interpretations or subsequent changes of laws, regulations and rulings.

CRC#3534838 (05/2024)

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