GEO INSIGHTS

At the Canva Create event in Los Angeles, a playful rap performance highlighted the cultural differences between Australian and US tech scenes, occurring just after a significant share sale made many early Canva employees millionaires. This spectacle underscores a broader trend among Australian startups to emulate Canva’s employee equity approach to motivate and retain talent. Despite mixed reactions in Australia, such cultural expressions and generous equity schemes are seen as vital for driving innovation and growth in the tech industry.

Lawyers at McCann FitzGerald recommend employers reconsider offering a Revenue-approved Save As You Earn (SAYE) scheme due to its risk-free, tax-efficient savings and share purchase options for employees, which can enhance engagement and retention. Despite the decline in SAYE savings carriers in Ireland post-Brexit, a new licensed provider is expected to be announced soon. SAYE schemes allow employees to save between €12 and €500 monthly for three to seven years, with the option to buy company shares at a discounted rate, and if they choose not to buy, their savings are returned tax-free.

A proposal has been made to allow start-ups to defer the tax point for employee share schemes (ESS), aiming to ease the tax burden on employees who may struggle with illiquid shares. The deferral option is not a tax concession, as employees will be taxed on any further appreciation in share value, and employers won’t receive tax deductions until the deferred taxing date. Start-ups are encouraged to provide feedback by March 15, 2025, as this is a rare opportunity to influence the proposal, which may be elective and apply to unlisted businesses with a turnover under NZ$15 million.

If your organisation has issued shares or securities to employees, you may be required to report this to the Australian Taxation Office (ATO) under Employee Share Scheme (ESS) rules, with key 2025 deadlines being 14 July for employee statements and 14 August for the ATO report. Accurate records are essential to determine if a taxing event has occurred, as ESS interests may be taxed either upfront or deferred, and detailed information must be reported for both employees and the ATO. Moore Australia offers support in navigating ESS compliance, including plan reviews, valuations, and submissions, especially in light of recent legislative changes like the removal of cessation of employment as a taxing point.

Joseph Blasi, Director of the Institute for the Study of Employee Ownership and Profit Sharing at Rutgers University, provides invaluable insights into the politics and potential of employee ownership within the contemporary economy.

Despite being one of the most marketable athletes in the world, Caitlin Clark will earn a modest $76,535 in her first year with the WNBA's Indiana Fever, which is standard for top rookies but starkly contrasts with the multimillion-dollar contracts of NBA counterparts. The WNBA players receive only about 10% of "basketball related income" compared to the NBA's 50%, leading many to play overseas to supplement their earnings. Although Clark’s high profile is drawing attention to these disparities, her substantial endorsement deals, including a potential $28 million contract with Nike, ensure a lucrative financial future.

Richer Sounds successfully transitioned to an employee share ownership trust, transferring 60% of shares from founder Julian Richer to employees in May 2019, overseen by RSM's People Advisory Services team. This transition involved corporate restructuring, maintaining business culture, and legal and tax compliance, ultimately preserving the company’s employee-focused ethos. The project, completed in 18 months, was well-received by the media, and employees received celebratory bonuses from Julian Richer, enhancing recruitment, engagement, and retention.

Budget 2025 allocates $75 million over four years to tax changes aimed at boosting foreign investment in infrastructure and helping startups attract and retain talent. This includes $10 million to allow deferral of tax on employee share schemes until a liquidity event, easing cashflow issues for employees. Additionally, $65 million is set aside for potential reforms to thin capitalisation rules to encourage debt-financed foreign investment, especially in infrastructure.

Paytm's board approved the allotment of 87,373 stock options under its ESOP 2019 plan, with each option priced at INR 9, totaling INR 63,57,92,534 in share capital. This move aims to retain talent and boost productivity amidst controversies and top-level reshuffling, with the company's stock experiencing a significant decline. Paytm joins other Indian tech firms in strengthening its ESOP scheme, reflecting a trend in the industry.