GEO INSIGHTS

France has introduced changes to profit/value-sharing rules and new ESG requirements for employee savings plans (PEE and PER). From 2025, companies with over 10 FTEs and meeting profit criteria must implement a profit-sharing mechanism, such as profit-sharing agreements, incentive agreements, or value-sharing bonuses, though preferential tax treatment for the Value Sharing Bonus will become more restricted unless paid into approved savings plans. Additionally, from July 2024, PEE and PER plans must offer at least one investment option aligned with energy, ecological, or socially responsible criteria, alongside the mandatory socially responsible fund.

In 2024, Italy saw a surge in the adoption of Broad-Based Employee Share Plans (PADs), with notable companies like Eni and Unicredit implementing them as a form of employee remuneration. PADs allow employees to acquire company shares through purchase or as free gifts, often with incentives like discounts or free shares for those who buy. These plans serve multiple purposes, including attracting and retaining talent, enhancing employer branding, showcasing corporate stability to investors, and fostering a culture of ownership among employees.

Camurus AB announced that 142,300 options from its ESOP 2021/2024 program were exercised in September 2024, generating SEK 37.5 million through the issuance of shares at SEK 263.50 per share. Employees, including the CEO, participated in cashless exercises, selling shares to cover the cost of subscription and taxes. The exercise period for the stock options program will conclude on December 16, 2024.

Capgemini has launched its 11th global employee share ownership plan (Esop), covering 97% of its workforce, including most of its 175,000 employees in India, as part of efforts to align employee interests with company performance. The Esop, offering up to 2.7 million shares (1.56% of outstanding shares), aims to sustain employee ownership at around 8% of the company's share capital, with investment options protecting employees against potential losses during the non-tradable period. Despite a 2.6% revenue decline in H1 2024, Capgemini maintained a 12.4% operating margin and increased organic free cash flow, reinforcing its financial stability as it rolls out this initiative.

Enterprise Management Incentive (EMI) schemes provide significant tax benefits for trading companies with gross assets of £30 million or less, allowing them to recruit and retain employees through share options without incurring income tax or national insurance contributions upon grant or exercise. Companies can grant options valued up to £250,000 per individual, with a total limit of £3 million, while ensuring that qualifying employees work at least 25 hours per week or 75% of their time for the company. However, companies must navigate potential pitfalls, such as changes in control or trading activities, and adhere to strict reporting requirements to maintain the favorable tax treatment of EMI options.