Global, all-employee plan hits the target for post-IPO HENSOLDT

An IPO (initial public offering) is a crucial time for any company and can serve as the perfect opportunity to reassess how their employee equity awards are offered – especially when looking to offer equity in multiple jurisdictions globally.

This was the situation that faced German defense and aerospace company HENSOLDT AG. Navigating different tax rules and regulatory regimes can be enormously challenging and these restrictions can often lead to employees in one country benefiting from more favorable terms than those in another. This was something HENSOLDT wanted to prevent and ensuring a level playing field for all employees, regardless of location, was essential.

The background

Headquartered in Germany, HENSOLDT was previously part of Airbus and traces its history back more than 150 years through a number of predecessor companies, but became a standalone in its own right in 2017. The company, which went public in 2020 (Frankfurt Stock Exchange), now employs around 9,000 people in 19 countries.

Hensoldt partnered with J.P. Morgan Workplace Solutions in 2021 for the development and introduction of Echo, an employee stock purchase plan (ESPP). The Echo initiative was made available in four countries – Germany, France, South Africa and United Kingdom – which accounted for more than 95% of overall employees at the time.

The challenge

Securing employee buy-in to the big picture and encouraging them to make a connection between their efforts and overall company performance was a top priority. During the design stage extra care was needed in navigating cross-border compliance issues, which proved to be of particular relevance in South Africa, where there were stricter regulations around employee equity plans.

Language was also an issue – multiple jurisdictions can mean multiple languages. This needed to be factored in to the communications strategy and the ongoing administration of the plan.

Currency was another consideration, with the plan needing to operate in euro, sterling and rand.

The solution

HENSOLDT and Workplace Solutions worked closely together to make Echo equally accessible to all employees in the four countries.

In practical terms, that meant finding out which solution would work best for employees based in South Africa (the jurisdiction with the tightest regulation regime), then using that as a guide for the offering across all countries. Taking the time to do an analysis of the South African equity market meant that the company was able to realize its vision of equal opportunity for all.

Workplace Solutions and HENSOLDT engaged closely throughout, devoting time to teasing out the necessary steps from design, to setting the rules, all the way to the board ultimately giving its approval to proceed.

The communications challenges were tackled next. Prior to launch a brochure was distributed to all employees in three different languages (German, English and French), along with customized videos and tutorials about using the Workplace Solutions app.

Even the name of the plan – Echo – emphasized the company’s determination to treat participants equally. ‘Echo’ has the same meaning across all three languages, so no translation was required. The name also spoke to the nature of the company’s business, tying into radar technology which sends out a signal that then ‘echoes’ back – an apt metaphor for what an employee equity plan aims to achieve.

What about the plan?

When the Echo plan launched there were five purchase price options, with each participant free to choose one. The packages allowed for the purchase of company shares to the value of €100, €200, €400, €800 and €1,500 in France and Germany, and the equivalent figure in the local currency in South Africa and the UK.

A 50% discount would be automatically applied, with the company also pledging to match each individual’s investment, with an eye towards reducing whatever level of risk participants might feel would be associated with the transactions. That meant if a participant opted for the €1,500 package, they would only contribute €750, with the company then contributing an additional €750. The same arrangement applied for each of the five levels.

The plan was made available to all employees in the four countries, giving individuals at all levels, including maintenance, engineers, and factory workers the opportunity to invest in the future of the company.

Under the rules, once employees signed up they would be obliged to retain those shares for at least one year. After that vesting period was complete, they’d be free to sell or transfer shares to their private securities account.

In practice, when participants placed an order to purchase a share package this was equivalent to an instruction being given to Workplace Solutions to buy stock corresponding to the specified value. Since we offer a fully managed solution, we can facilitate these trades through our platform, meaning there is no need for a third-party bank. Once the vesting period is complete, participants can conduct all transactions online via their mobile app. This ability to streamline the process was one of the reasons why HENSOLDT opted to partner with Workplace Solutions.

What did success look like?

The initial launch in 2021 was a massive success, far exceeding HENSOLDT’s expectations. The company expected take-up somewhere in the 20% to 40% region, but instead the final figure was 66%, well above the norm for similar initiatives. Germany led the way on 76%, with France ranking fourth with a still respectable 31%. It’s also noteworthy that 93% of participants chose the maximum investment option, suggesting strong belief in the company’s long-term prospects.

The success of the initial offering was such that the company has since committed to launching a new tranche on a regular basis. In the 2024 round 5,356 individuals signed up. This was deemed particularly impressive given that the company share price was far higher at the time than it was in 2020, something which could have dissuaded employees from participating but appears not to have done so.

What next?

The Echo ESPP has become a fixture in HENSOLDT’s overall compensation offering. The plan is actively promoted by the company as part of the recruitment process and they report that it has proven helpful when looking to secure new talent.

The success of Echo and HENSOLDT’s commitment to continuing with it demonstrates that they are now an established employee equity compensation company. 

*Figures relate to October 2025 tranche

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