As I had discussed back in January 2015, changes to the moribund French-qualified RSU regime had been proposed by the French Government which would have made granting French-qualified RSU awards again much more beneficial to both the company and the employees. Alas, the wheels in France turn slowly and we are still waiting for the law to be adopted.
What has happened in the meantime is as follows:
The French Parliament actually adopted the proposed law at the end of February 2015. The law was then sent to the French Senate for further debate. Unfortunately, at the Senate level, the law was amended and the reduced vesting/holding periods now only apply to so-called SMEs. These are small and medium size companies which employ fewer than 250 persons and which have an annual turnover not exceeding € 50 million, and/or an annual balance sheet total not exceeding € 43 million.
October has been an important month for equity awards in Australia.
It has been common practice in certain industries to provide favorable equity award treatment to employees who terminate due to retirement. Often, retirement is defined with reference to reaching a certain age, or a certain age plus a certain number of years of service with the company (e.g., 55 years and 10 years of service). Employees who meet the definition of retirement will be allowed to continue to vest in awards after termination, have vesting of their awards be accelerated, or be allowed a longer post-termination exercisability period (for options).
An issue that is often neglected when implementing an equity plan on a global basis is the compliance with global privacy regulations. Legislation intended to protect an individual’s right to privacy has existed for many years in the European Union (introduced by an EU Directive in 1995), but data privacy has not been a hot topic in most other countries (including in the U.S.). In the last several years, there has been a flurry of new data privacy laws around the world, especially in Asia Pacific, no doubt brought on by the proliferation of global internet use and the concern about data privacy on the internet.
As I work with companies expanding into the UK, one issue that comes up regularly is whether to transfer the employer social taxes due on equity income (known as employer National Insurance Contributions or NICs) to employees. Employer NICs are due on equity income if the taxable event occurs at a time when there is a market for the company’s shares (typically, when the shares are publicly traded). If due, employer NICs are payable at a rate of currently 13.8% and are uncapped (meaning they are due no matter how much income the employee realizes). This distinguishes the UK from many other countries (e.g., the US or Germany) where social taxes are also due but only up to a certain threshold (or income ceiling). Often the employee has already reached this threshold with her regular salary such that no social taxes are due on equity income.