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Global Equity Organization (GEO) Global Share Plans Ranking Study (2023-2024)

By 1 Min Read

In collaboration with leading experts in the design, implementation, and administration of employee share schemes, the GEO Global Share Plan Rankings Study evaluates the receptivity of various countries operating environments to the adoption and participation in these schemes by employers and employees. Discover the countries that excel as global leaders in fostering employee share schemes, harnessing their potential to drive organizational growth and enhance employee prosperity. As a proud sponsor of this survey, we encourage you…

Global Share Plan Update (September 2024)

By and 1 Min Read

We have released the September 2024 edition of our “Clients & Friends Newsletter,” which reviews the latest developments impacting share plans globally. Explore the newsletter, and/or register for our upcoming October 8th webinar, to learn more about the impact of the following tax, legal and regulatory changes on your share plans:

T+1 is Right Around the Corner – Time to Confirm Your Equity Award Tax Readiness

By and 5 Mins Read

The Securities and Exchange Commission (SEC) last year amended rules under the Securities Exchange Act of 1934 to shorten the securities transaction settlement cycle for most broker-dealer securities transactions, from “T+2” to “T+1,” meaning that securities transactions will need to be settled within one business day of the transaction date (“T”), effective as of May 28, 2024. Impact on Equity Awards The new SEC-required settlement timing will directly impact equity awards that are settled through…

A Cautionary Tale: US Estate Tax May be Due on Equity Awards/Shares Held by Non-US Residents

By 6 Mins Read

One of the biggest sleeper issues (in my opinion) for US companies when granting equity awards to non-US employees or other service providers is the fact that their heirs may be assessed with US estate tax and be required to file an estate tax return in the US if the individual dies while holding equity awards or shares. US Estate Tax Exemptions Individual US taxpayers (i.e., US citizens and non-US citizens who are domiciled in…

The Case for Not Mentioning Equity Awards in Offer Letters

By 5 Mins Read

In many cases, when a candidate is recruited, they are being offered a new hire grant of equity awards and (possibly) subsequent “refresh” grants. Depending on the company, this can be a significant component of the employee’s total compensation and may be the most important piece to get the candidate to accept the offer.  So, naturally, companies tend to include information about the equity awards in the offer letter provided to the candidate, together with information…

Global Considerations for Cashing Out Equity Awards in Mergers

By 1 Min Read

In M&A transactions, it is common for companies to cash out the vested equity awards of the target company and convert any unvested portion of the award into an award that will pay out in the future. In our latest guest blog post for the NASPP, we look at the various global tax and regulatory considerations and flag potential risks ranging from unfavorable tax treatment to compliance issues under local rules and regulations.  To read…

Why US Employers Should Review Noncompetes in Equity Award Agreements

By 2 Mins Read

We are pleased to share a recent LegalDive article, “Why companies should review noncompetes in equity award agreements,” with quotes from Barbara Klementz. Given increased government scrutiny, employers need to be mindful of the time periods noncompetes cover and review state-specific requirements. In the light of the sharp focus the federal government and a growing number of states have placed on noncompetes, many employers have reexamined their use of that type of contractual clause in…

Beneficiary Designation Drawbacks

By 1 Min Read

When we are asked to review equity plans and related agreements governing equity awards and share purchase rights granted to participants in the United States and abroad, they often contain beneficiary designation provisions. While nice in theory, beneficiary designations are administratively burdensome and fraught with pitfalls, particularly outside the United States. As we’ve recently been helping several companies work through the ins and outs of the treatment of awards upon the death of a participant,…

Reevaluating Restrictive Covenants in Equity Award Agreements

By 1 Min Read

Given recent developments and trends in the United States relating to restricted covenants (especially noncompetes), companies should take another look at any restrictive covenants included in equity award agreements. In the past, companies rarely tailored restrictive covenants in equity award agreements to each jurisdiction (US states or countries outside the United States). Now, with so many new restrictions in the United States, it is more typical for companies to tailor the restrictive covenants for compliance…

Understanding the Impact of the New US Stock Buyback Excise Tax on Stock-Based Compensation

By , and 8 Mins Read

On August 16, 2022, President Biden signed the Inflation Reduction Act (“IRA”) into law. One of the new provisions the IRA introduced is the stock buyback excise tax under Code section 4501, which applies as of January 1, 2023 and was designed to target large corporations that implement stock buybacks. Background Code section 4501 imposes a 1% excise tax on the value of covered corporation stock that is repurchased by the covered corporation or a…

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