GEO INSIGHTS

Equity compensation—such as restricted stock units (RSUs), stock options (ISOs and NQSOs), and employee stock purchase plans—has become increasingly common, offering employees potential wealth-building opportunities but also creating complex tax considerations. Understanding vesting schedules, tax treatment, strategies like Section 83(b) elections and net unrealized appreciation, and risks such as concentrated stock positions is essential to maximizing value and avoiding costly surprises. With proper planning and coordination with tax and financial advisors, equity awards can be transformed into a strategic asset that supports both short-term financial needs and long-term goals.

Around 5,700 Jet2 employees are set to share a £58 million payout as the airline’s first sharesave scheme, launched in August 2022, matures, with returns boosted by an 84% rise in share price. Employees who participated can either hold or sell their shares, with typical investors seeing gains of several thousand pounds depending on their monthly contributions. Following this success, Jet2 has introduced three more sharesave schemes for over 8,900 employees, alongside ongoing salary increases, profit-sharing, and bonus schemes to reward staff for their customer-focused performance.

Despite a year of global economic, political, and environmental challenges, most multinational companies remain committed to employee well-being, offering programs like counseling through Employee Assistance Programs (EAPs) and promoting healthy work-life balance. Encouraging managers to model boundaries and use PTO helps prevent burnout, retain top talent, and support employees with caring responsibilities. Forbes’ 2025 World’s Best Employers ranking, based on surveys of over 300,000 employees in 50+ countries, highlights 900 companies excelling in pay, career growth, work-life balance, and overall reputation.

Elis has launched its 2025 “Elis for All” employee share ownership plan, offering eligible employees in France and 20 other countries the chance to subscribe to company shares through two capital increases capped at €2 million (0.85% of share capital). The plan uses a classic structure with a 30% discount on the reference share price and a matching contribution of one free share for every 10 subscribed, with holding periods of five years in France and three years internationally. The subscription period runs from 16 September to 2 October 2025, with new shares expected to be admitted to trading on Euronext Paris after completion in November 2025.

Many incentive plans rely on binary, high-risk equity like growth shares, which suit founders but can be unfair for professional hires who face the risk of ending up with nothing. Pairing growth shares with a lower-volatility instrument like a CSOP creates a balanced incentive stack, preserving upside while cushioning modest outcomes and keeping executives engaged. Ultimately, good incentive design is risk design: combining armour and ammunition manages downside as well as upside, which is essential in volatile markets.

In 2024, New Zealand businesses faced political uncertainty and a challenging economic climate, yet continued to implement employee share plans (ESPs) to retain key talent amid ongoing migration and talent competition. Long-term incentives (LTIs) showed greater variation in face values, with ESG metrics increasingly incorporated into performance and vesting conditions alongside financial targets, reflecting formalised climate and sustainability reporting requirements. Effective ESPs, particularly when clearly communicated and supported by technology, boost employee engagement and loyalty, while recent tax changes—such as higher tax-free thresholds and proposed deferral regimes—aim to make these schemes more attractive and accessible.

Elon Musk is asking a US court to dismiss an SEC lawsuit accusing him of saving $150 million by disclosing his Twitter stake late in 2022, in violation of rules requiring disclosure within 10 days of surpassing 5% ownership. His lawyers argue the case is baseless, saying he corrected the filing quickly, caused no harm to investors, and is being unfairly targeted due to his public criticism of the regulator. The SEC maintains Musk’s delay caused economic harm and is seeking unusually large monetary penalties compared to similar cases.

Denmark has proposed draft legislation to expand tax relief for employee share schemes, removing the 50% salary cap and extending eligibility to companies up to 10 years old with as many as 150 employees and turnover up to DKK200m. The bill also suspends the carbon tax on fishing from 2026–28, phasing it in from 2029, alongside new VAT exemptions for education under age 30 and adjustments to corporate tax collection rules. If approved, the measures would take effect on January 1, 2026, with consultation open until September 25, 2025.

The Centre on Mutual and Co-Owned Business at Kellogg College has awarded Professors Andrew Pendleton and Andrew Robinson the inaugural Nigel Mason Award for Employee Ownership Research, recognising their paper on employee ownership trusts as a model of impactful scholarship. The award, launched in memory of employee ownership advocate Nigel Mason, highlights outstanding contributions that advance understanding and practice in the field. Other shortlisted researchers, Professor Niels Mygind and Martin Stucki, were also commended for their work on employee ownership models and entrepreneurship.