Boku Inc. has announced an Extraordinary General Meeting (EGM) on September 11, 2024, to seek shareholder approval for a new executive share plan. The plan, designed to reward exceptional performance, will grant restricted share units to the executive team, with vesting conditions tied to the company's stock price performance over the next several years. Shareholders can participate in the EGM via teleconference and are encouraged to submit questions in advance, with further details available on the company's website.

Startups often offer a mix of equity compensation and salary to attract and retain talent, with the balance dependent on the company's financial resources and the competitive market landscape. In the UK, the current high inflation and tight labor market have pushed average wages up by 13% since early 2022, making it crucial for startups to understand salary ranges and negotiate effectively. Equity compensation, while beneficial for startups in managing budgets and motivating employees, comes with complexities and risks that both employers and employees need to carefully consider.

On June 21, 2024, Howden announced that 656 employees have invested in the company through its 2024 Internal Share Offer (ISO), increasing the total number of employee shareholders to about 5,200 across 48 countries. Howden, the second largest employee-owned business by turnover in the UK, attributes its sustained growth and success to its employee ownership model, which also benefits its charitable Foundation. The company’s model is highlighted by recent research showing higher productivity and profitability in employee-owned businesses, and Howden is actively supporting the employee ownership sector by sponsoring the UK Employee Ownership Awards 2024.

A recent Sifted survey reveals that over a quarter of European startup employees see their stock options as a stepping stone to starting their own businesses, reflecting growing entrepreneurial optimism. However, about one-third are doubtful about the financial returns of their options, and many lack understanding of their true value, with over 40% unaware of their worth and nearly 45% not receiving guidance on how to exercise them. Effective communication of stock option benefits and proper scheme management are crucial for maximizing their potential as a tool for talent attraction and retention.

Civitta, in collaboration with Google, has released a comprehensive report on the Baltic startup ecosystem, highlighting its significant economic impact but noting challenges in scaling due to funding and talent shortages. The report emphasizes that while the startup sector is growing, only a few companies achieve substantial success, and leveraging stock options could help attract and retain top talent. Additionally, the report underscores the importance of persistence in securing funding and engaging with EU policy to facilitate growth and global expansion for Baltic startups.

In Latvia, secondary sales of stock options during funding rounds, such as those seen with Lokalise and Printify, offer early employees a tangible reward and financial cushion before a company’s exit. Unlike the typical startup exit through IPO or acquisition, these sales provide a valuable taste of the potential financial gains from stock options, especially in a region with limited exit success stories. As European startup ecosystems face sluggish IPO markets and less frequent funding rounds, secondary sales are becoming a crucial mechanism for motivating and retaining talent.

In Estonia, equity awards are generally taxed as fringe benefits at the corporate level, with a combined tax rate of 66.25% on the net benefit received by the employee, increasing to approximately 70.5% from 2025. The taxable event occurs when employees receive the shares, and the taxable value depends on the type of award, such as RSUs or stock options. Tax exemptions are available for equity awards if there is a minimum holding period of three years and the awards are for shares in the employer or its group, with specific reporting requirements for both the employer and employee.

Turkiye's new Law No. 7524, effective from August 2, 2024, exempts from income tax the benefits of share certificates given to employees by technology startups, up to the amount of the employee's gross salary. The law amends Article 17 of the Turkish Income Tax Code, providing this exemption for shares granted free of charge or at a discount, with tax collected if the employee sells the shares within 12 years, based on a sliding scale. Technology startups should evaluate how this new exemption impacts their business and seek professional guidance if needed.

In a landmark decision, the Antwerp Labour Court of Appeals ruled that Belgian employee social security contributions are not due on equity-based compensation (RSUs) granted by a U.S. parent company to employees of its Belgian subsidiary. The court concluded that these RSUs were not provided as part of the employees' service to the Belgian subsidiary but were instead granted by the U.S. parent company to retain employees long-term, with the parent company assuming full financial and legal responsibility. This decision provides an opportunity for companies to review their equity compensation policies and potentially claim refunds for social security contributions paid in the past three years.