A global stock plan is any stock-based plan that operates for the benefit of employees in more than one location, normally over shares in the parent company of the relevant group.<\/p>\n
Although globalizing a stock plan can be complex, having it planned carefully from the outset, together with a robust communication plan can see a lot of success. In this post, we\u2019ll talk about:<\/p>\n
Any\u00a0employee equity plan<\/u><\/a>\u00a0should have a clear objective and that a considered strategy should be put in place to reach that goal. Here\u2019re some common goals we’ve heard:<\/p>\n Despite being fundamental, many employers don\u2019t have one in place, resulting in an inefficient design and implementation process, and thus a low program participation rate.<\/p>\n Having objectives implemented allows you to pick the right equity awards, design proper vesting schedules, and plan your comms strategy. If you get them right, you\u2019ll see lots of success.<\/p>\n In our recent webinar, Julie Shepherd, Director of Stock Plans at Sage, tells the story about how she launched a global employee scheme to a potential 13,000 people<\/strong> \u2013 all during a once-in-a-century pandemic \u2013 and still saw a record 20%<\/strong> of the entire workforce sign up.<\/p>\n It isn\u2019t unusual that companies want to launch the same ownership plan in all jurisdictions but there\u2019s a balance to be struck between global consistency and local differences when it comes to going global.<\/p>\n Here\u2019re some key considerations for each jurisdiction during globalizing a stock plan.<\/p>\n So, if they\u2019re a concern or don\u2019t align with the company objectives for some regions, it\u2019s not necessary to insist on global consistency. You can instead go for local customization by setting up a local sub-plan under your existing \u2018\u2019parent\u2019\u2019 plan with modifications\u00a0like this example<\/u><\/a>.<\/p>\n Contact local experts<\/u><\/a> (or global experts with local knowledge) to ensure you are in line with local practices.<\/p>\n \t\t\t As just discussed, going global is not necessary to stick with one single plan. We can utilize the local scheme\u2019s tax benefits to achieve better participation results.<\/p>\n For example, you offer tax-advantaged ISOs to your employees in the US and decide to expand the same program to your employees in the UK subsidiaries as they work well in the US. You probably need to re-think it as the tax advantages of ISOs don\u2019t likely apply to taxpayers outside the US. You can instead consider tax-advantaged UK\u00a0employee share schemes<\/u><\/a>, which are similar to ISO, to benefit your UK employees.<\/p>\n A program\u2019s success is often associated with the economic outlook.<\/p>\n \n\t\t\t\tThe less disposable income an employee has, the less likely it is that investing in stock plans will be a priority.\t\t\t<\/p>\n\n
Local customization vs Global consistency<\/b><\/h2>\n
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\n\t\t\t<\/a><\/p>\nThink locally<\/b><\/h2>\n
Make use of the local scheme\u2019s tax benefits:<\/h3>\n
Consider local economy:<\/h3>\n
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