GEO INSIGHTS

As of April 1, 2025, employers can choose to tax employee share and option benefits either at the time of acquisition (as was the case before 2024) or defer taxation to a later statutory moment (as per the 2024 regime). If opting for deferred taxation, employers must notify tax authorities within strict deadlines, or the benefits will be taxed immediately upon acquisition. Importantly, this new rule applies retroactively to shares and options acquired from January 1, 2024, and employers must declare their intent to defer taxation by May 30, 2025, or the income will be taxed in May 2025.

Employee Share Scheme (ESS) reporting in Australia requires employers to meet strict deadlines, accurately prepare statements, and manage complex tax rules, especially for globally mobile employees. Key obligations include issuing ESS statements to employees by 14 July and lodging reports with the ATO by 14 August, while understanding taxing points and legislative changes is crucial for compliance. Services like Automic can help simplify the process by managing data, ensuring accuracy, and handling submissions to the ATO, reducing the risk of penalties and easing the administrative burden on employers.

ASIC’s 2025 Draft Instrument introduces key updates to the regulatory framework for employee incentive schemes by unlisted companies, replacing the expiring Class Order [CO 14/1001] with more flexible and less burdensome requirements. The new instrument removes obligations such as ASIC notification, financial disclosures, and the $5,000 annual cap per employee, while simplifying trustee administration and expanding small-scale offer exemptions. These changes significantly reduce compliance burdens and enhance flexibility for unlisted companies, though businesses must still consider fair share valuation, employee communication, and tax implications.

Svitzer Group has introduced a new Employee Share Purchase Plan (ESPP) for 2025, inviting its Global Leadership Team to purchase company shares and receive an equal number of matching shares, which will vest over three years, promoting ownership and retention. In addition, the company will issue annual grants of Restricted Share Units (RSUs) under its existing Long-Term Incentive Plan, with the CEO and CFO receiving RSUs equivalent to 85% and 60% of their base salaries, respectively, also subject to a three-year vesting period. The total value of Matching Shares and RSUs granted for 2025 may reach up to DKK 3 million and DKK 12.2 million, respectively.

Long-term incentive (LTI) plans have evolved dramatically since 1995, shifting from simple stock options focused on financial metrics like EPS to sophisticated, strategy-driven programs incorporating ESG goals, human capital metrics, and customized award structures. This transformation has been driven by regulatory changes, new technology, evolving workforce expectations, and a broader push for stakeholder alignment, with tools now enabling real-time tracking, personalization, and advanced analytics. Despite these innovations, fundamental human factors—like the desire for recognition, fairness, and ownership—remain central to LTI effectiveness and will continue shaping future designs into 2035 and beyond.

In today's rapidly evolving business landscape, strategic alliances are no longer optional—they're essential for navigating complexity and fostering innovation. Companies that embrace collaborative ecosystems are better positioned to unlock new opportunities, mitigate risks, and achieve sustainable growth in the competitive equity management space.

With their combined decades of experience in the equity compensation landscape, Hannah McCullough, Justin James, and Dan Mullen from insightsoftware offered valuable insights and practical strategies for companies striving to amplify their equity programs and stay ahead in a dynamic regulatory environment.

The equity management ecosystem: key players

Successful equity management relies on a collaborative network of service providers, each offering specialist expertise:

• Software providers: Companies like insightsoftware deliver technology for reporting, data management, and automation. Certent Equity Management from insightsoftware simplifies equity administration and enhances accuracy.
• Administrative service providers: handle day-to-day operations like grant administration and stock settlements.
• Brokerage and participant servicing providers: facilitate transactions and provide employee education and support.
• HR partners: manage employee data and integrate equity compensation into broader benefits programs.
• Transfer agents: maintain stock ownership records and ensure compliance.
• Tax support providers: offer expertise in navigating complex tax regulations.

The challenge is two-fold: firstly, selecting the right vendors for each of these roles, and secondly, ensuring these players work seamlessly together to share data and coordinate processes. As Dan Mullen noted, issuers should consider "best in breed, best in class solutions" that integrate and deliver seamless experiences.

Key challenges for issuing companies

Managing equity plans is a high-stakes responsibility for issuers. They must coordinate multiple providers, each with their own systems, processes, and data formats. The main challenges include:

1. Compliance and regulatory complexity
2. Employee education and engagement
3. Managing global equity plans
4. Data accuracy, privacy, and record-keeping.

Actionable steps to successful strategic partnership integration

The webcast highlighted that overcoming these challenges requires issuers to embrace technology and cultivate strategic partnerships. Cutting-edge solutions, built for automation and seamless integration across the entire equity management ecosystem, are crucial.

When solutions work in harmony, they enable more efficient transactions and user experiences, ultimately driving optimal outcomes for both issuers and their employees.

Here’s how to identify and maintain successful partnerships:

• Define clear goals from the outset: outline specific objectives for equity management.
• Assess current capabilities: identify gaps that partnerships can address.
• Research potential partners: look for proven companies with strong reputations.
• Evaluate integration capabilities: ensure seamless integration with existing systems (insightsoftware’s Certent Equity Management is designed to do just this).
• Establish clear communication: foster open communication and regular check-ins.
• Monitor performance and provide feedback: continuously assess and adjust for the best outcomes.

Embracing partnership for equity management success

Modern equity management is inherently complex, making strategic partnerships essential in overcoming its challenges. By leveraging integrated solutions like Certent Equity Management, and fostering strong relationships with key service providers, issuer companies can streamline equity plan administration, ensure compliance, enhance employee engagement, and enjoy the impact of equity compensation as a tool for attracting, retaining, and motivating talent.

The key takeaway is clear: a collaborative, integrated approach is no longer a luxury—it is a necessity for success in today’s dynamic equity management landscape. For more information or to arrange a demo of Certent Equity Management, contact Justin James, Hannah McCullough, or Dan Mullen directly.

Watch a recording of the webcast on GEOlearn: HERE.

EssilorLuxottica has launched “SuperBoost 2025,” a global employee share ownership plan offering workers, including those in Morocco, the chance to buy company shares under favorable conditions. The initiative, part of its International Employee Shareholding Plan (P.I.A.S), includes incentives such as free matching shares to encourage participation, with up to 900,000 shares available at €282.05 each. Approved by Morocco’s Capital Markets Authority, the plan aims to boost employee engagement and continues the company’s effort to promote shared growth through ownership.

The Canadian government has deferred the proposed increase in the capital gains inclusion rate and corresponding reduction in the employee stock option deduction from June 2024 to January 2026. As a result, for 2025, qualifying employee stock options will still benefit from the current one-half deduction rate when calculating income tax withholding. Additionally, the Canada Revenue Agency has provided temporary relief from late-filing penalties for certain information returns, while Revenu Québec will maintain the one-half deduction but has not announced similar penalty relief.

Starting January 2025, Israeli companies offering equity compensation will face significant changes in reporting requirements due to updates from the Israel Tax Authority (ITA), including a mandatory shift to an online reporting system. Companies will need to submit quarterly and annual reports with detailed information about equity awards, employee status, and tax withholdings, as well as complete comprehensive questionnaires about their plans. Non-compliance with these new requirements could jeopardize employees' tax benefits, lead to audits, or result in financial penalties, making early preparation and expert guidance essential for ensuring compliance.