Operating an employee share plan in multiple countries

April 21, 2021 |



 

There’s been a lot of talk about borders in the last few years. Goods going this way, information going that way, taxes not going this way, tariffs added for things going that way… it’s all very complicated whether you know what you’re doing or not.

When it comes to employee share plan administration those invisible lines on the map do add complications but, with the right strategy and process, you can make your global employee share plan an integral part of your company’s international culture.

Set your strategy (and your goals)

It goes without saying that any employee share plan should have a clear goal, and that a considered strategy should be put in place to reach that goal. In multinational companies, however, it can sometimes be the case that big projects simply roll from one year to another without anyone pausing for any significant amount of time to figure out if it’s still the best way of doing things.

A strong leader is needed to roll-out an employee share plan across the world. They need to be a communicator at all levels, someone prepared to question what has gone before, and someone with the authority to be agile when executing the strategy.

In this recent webinar, Julie Shepherd, Director of Share Plans at Sage, tells the story about how she launched an organisation-wide employee SAYE scheme to a potential 13,000 people across 23 countries - all during a once-in-a-century pandemic – and still saw a record 20% of the entire workforce sign up.

 

Know local laws and regulations

Without question, the most important part to get right with your international employee share plan is to understand the different laws and regulations in each jurisdiction. The cascading effect of these means you need to get the initial set-up correct, or else you will be hit with unforeseen problems from the time-consuming to the legally perilous.

Consult with experts (like here in Global Shares) who can guide you through that initial set-up and advise on what steps you need to take.

 

Digitise the process

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Quite simply, you can’t do this on spreadsheets - you need equity compensation software to manage this level of complexity.

If you’re operating in multiple jurisdictions and in multiple languages, you need a digital platform to keep the data accurate and easy to manage. With different vesting dates, tax rules, regulations and all the other moving elements in an employee share plan, it will soon become out of control if you’re not using equity compensation software like ours at Global Shares.


In their language (and currency)

Lots of people are intimidated by finances. Add a language barrier and people won’t even engage with the employee share plan no matter how good your messaging is. While it’s not practicably possible to cater for every language and currency, making a concerted effort to cater for a diverse group of people will greatly increase enrolment in your plan.

Cultural differences

Be hyper aware of cultural differences in how you roll out the plan, and whether the messaging should be different. For example, the US has a strong culture of employee ownership, while in Japan it is much less prevalent. Contact local experts (or global experts with local knowledge) to ensure you are in line with local practices and tweak your communications to fit.

 

Multiple communication types 

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If you’re operating across multiple countries, it’s almost certain that you are targeting a large base of employees to join the plan. In this case, make sure to use a wide variety of communications (videos, emails, face-to-face meetings) to get your message across.


Relative values

It’s important to note the relative values that shares will have in each country and be sensitive to that fact. Depending on how your plan is designed, and the relevant taxes and regulations in different countries, one employee may be able to buy a new car with their stock options, while another might be able to put an extension on their house for ostensibly the same stocks.


Share stories

One of the big challenges for any multinational corporation is creating a shared culture in their organisation. An employee share plan is a real, concrete way to connect people across the world. When a sales director in India sees how an engineer working in Austria has helped to add value to their own equity plan, and vice-versa, you can begin to cultivate that shared sense of purpose.

To do this, simply share stories of people benefiting from the plan, and connect it with the work being done the company. This will have the two-fold effect of making people already in the plan pleased that they are, and also make those people not in the plan seriously consider joining.

 

The next time you talk about borders, it doesn't have to be about the complications that they bring. By using the correct equity compensation software, and deploying them in a timely fashion, your multiple-country employee share plan can bring benefits to your organisation few other initiatives could. 

 

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Please Note: This publication contains general information only and Global Shares is not, through this article, issuing any advice, be it legal, financial, tax related, business related, professional or other. The Global Shares Academy is not a substitute for professional advice and should not be used as such. Global Shares does not assume any liability for reliance on the information provided herein.


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