Equity compliance for global employees is usually considered to be complex and expensive. Here, we give some useful tips as to how to get your approach right, and your costs low.
1) Believe you can do it!
Too many companies assume it is too difficult, and do not extend their equity to their international employees. Often, they offer cash as an alternative. This is such a shame – your overseas-based teams are just as motivated by an employee share plan as your ‘home country’ employees. Remember that thousands of companies around the world – big and small – manage to successfully operate their plans internationally.
2) Learn from other professionals
There are some excellent professional bodies for equity professionals, including the Global Equity Organization (https://www.globalequity.org/geo/index.php), and the National Association of Stock Plan Professionals (https://www.naspp.com). Many countries have national organisations promoting employee share ownership, such as ProShare in the UK (https://www.proshare.org). Joining these organisations is an excellent way of learning from others and seeking advice. Some of them have messageboards where information is exchanged, and this is a great way to share experience.
3) Get your plan design right
Good plan design is crucial, whether your plan is in one jurisdiction or multiple countries. When you are launching a plan internationally, take advice on the compliance consequences. Small adjustments to the plan before the launch can often make your life much easier.
4) Legal and tax issues are equally important
A share plan always has both regulatory and tax issues. You might have to make filings with national authorities, and there are sometimes annual tax declarations – both for the company and the participant. Plus, you need to be on top of the tax consequences of the different phases of your plan – for the parent company, the local company and, not least, the participants themselves.
5) Use professional advice carefully
Costs can quickly run out of control if you engage specialist advice in every country. By identifying key issues at the outset, you can control your budget and avoid paying top dollar for routine work.
6) Look at the technology options
A few specialists (like ShareReporter!) have set up databases of international regulatory and tax information. These can help reduce costs significantly, and give you a practical, commercial view of the issues. They are usually regularly updated, and available on a subscription basis, meaning the ongoing compliance can be budgeted.
7) Don’t forget employee communications
Companies tend to focus on employee communications to encourage take-up of the share plan, but then neglect to keep the participants up to date about the plan during its lifespan. Employees need to understand the tax (and sometimes regulatory) issues of the plans, and giving them tax guides for their country is recommended.
8) Some countries might be ‘impossible’ – it’s best to accept this reality
There are some countries where running your plan may just prove so difficult that it best to take a pragmatic view and accept that you will have to exclude them from the standard plan. Giving a cash alternative is a perfectly acceptable way to go.
9) Employee numbers make a difference
It is often assumed that it not worth operating a share plan in a country where you only have a handful of employees. In reality, the opposite can be true and your compliance risk rises with employee numbers. This is especially the case with security law filings.
10) Work with your administrator
The administrator of your share plan is a key ally, and should be able to offer some practical tips as to how other companies deal with international issues.

Mike Pewton, Sharereporter CEO