Santa Clara University

Santa Clara Magazine

Writing the rules

When it comes to laying out best practices for companies offering stock options, the national authority is right here on campus. And it's part of the Executive Development Center, a program whose roots reach back half a century to the days when aerospace ruled the roost in the Valley.

By Sandy Burnett

Silicon Valley may owe a lot of its success to the use of stock options as a way of fuelling growing and innovation, but they've never been easy to understand. And, in light of the current economy, their effectiveness may be in peril.

“When we talk about stock options with most people, it's like we're speaking Greek to them,” says Jule Torre '72, stock programs manager at Applied Materials.

And the bad economy is making the link between employee equity compensation and company stock values more pronounced than ever, according to Emily Cervino '92, director of the Certified Equity Professional Institute at Santa Clara (CEPI). At a time when equity compensation is already under increased scrutiny, the CEPI, which has crafted guidelines for managing equity compensation, has become the national authority on the subject with its series of “Guidance-Procedure-Systems” (GPS) research projects, now in their second year.

“We couldn't have picked a better topic for our 2008 release,” Cervino assesses. “It really is the best guidance for understanding restricted stock awards/units, which is one method of putting value back into the hands of employees.”

A changing center for a changing valley

The CEPI became part of the Leavey School of Business's continuing education arm-the Executive Development Center (EDC)-in 1992. The research and guidelines on equity compensation have raised the center's profile recently. But it was CEPI's professional certification function that put it on the map. Cervino had her first contact with CEPI in 1996, when she was offered a job contingent on getting CEP certification. At the time, the certification exam was offered at only three locations and study materials were still being developed. Today, CEPI has a formal curriculum and the exam is offered at 30 U.S. locations and in nine other countries.

The evolution of the CEPI follows both the evolution of Silicon Valley and of the Executive Development Center, notes Larry Robertson '74, associate dean of executive education, who heads the EDC.

“Aerospace was going great guns when the EDC began 50 years ago,” Robertson says. In fact, the EDC was a result of a request from Lockheed to Santa Clara University to train lower-level managers. By the 1970s, healthcare and government management programs were introduced. During the 1980s, the EDC began training mid- and high-level managers. The American Electronics Association has had a management education program-the second oldest on the West Coast-at the EDC for the past 30 years.

By the 1990s, when Robertson joined the faculty, things had started to change. “I think 1993 was the first year when there wasn't a single Lockheed program,” he says. “It was really kind of a watershed year. It was the year we launched an initiative called the Consortium of Executive Education, an advisory board of Valley business people that kept the EDC up to date on unmet needs.” This year, some 2,100 students from throughout Silicon Valley and beyond will participate in one or more EDC programs.

One-stop shop

Leah Verhoeven '05 serves internal program manager of Learning Services at Cadence Design Systems, Inc. She says the EDC's 12-year-old Cadence mini-MBA program is both a training tool and a recognition program for high-achieving, high-potential employees.

“They become better managers,” she says. “Even some of the executives who have MBAs like to brush-up-sharpen some of the tools in their kits.”

In addition to the custom programs and the CEPI, the EDC offers a series of public programs, an international program, and a specialized accounting program.

“We've become a one-stop shop for management training needs,” says Jan Sola, associate director of the EDC.

Eight years ago, the EDC introduced an intensive 11-week summer program-the Certificate of Advanced Accounting Proficiency-that includes the six classes that are prerequisites for the CPA exam. Demand has been so great that a school-year Saturday program has been added as well.

“There's a tremendous need for accountants in the Valley,” says Michael Eames, associate professor of accounting, who started the program. “It's designed for people who don't want to take a year or two to get a master's degree in accounting.”

As business has become increasingly global, so has the EDC. For the past nine years, the EDC has partnered with The University of St. Gallen in Switzerland to provide a month-long residential Silicon Valley experience for Swiss executive MBA students. Recently, SCU's Weekend Accelerated MBA Program's class of 2007/09 completed a week-long study module at the Swiss university.

These kinds of outreach programs, as well as programs in developing fields, are likely to fuel the EDC in the coming decades, says Leavey School of Business Dean Barry Z. Posner. The EDC's move into the new Lucas Hall offers other opportunities for expansion.

“With Lucas Hall's facilities, we have the potential for offering online programs and to broadcast off-campus,” Posner says. “That helps us further open up to the world. After all, continuous learning may very well be our only sustainable competitive advantage.”