GEO INSIGHTS

With IPOs increasingly delayed, employees at private companies are questioning the value of equity compensation, which was once seen as a path to significant wealth. To retain and motivate staff, HR teams are emphasizing transparency, educating employees about equity, and exploring alternatives like tender offers to provide liquidity before an IPO. As equity becomes a less certain benefit, companies are also highlighting other aspects of compensation and promoting a culture of ownership and open communication.

Renault Group is continuing its commitment to employee share ownership with the fourth edition of its Renaulution Shareplan, offering nearly 100,000 employees across 30 countries three free shares and the chance to buy additional shares at a 30% discount. From May 12–30, 2025, eligible employees in 24 countries can subscribe at €31.34 per share, significantly below the €44.76 reference price, with further benefits including free shares for each purchased share. This initiative underscores Renault’s focus on inclusive value sharing and employee engagement in the company’s long-term success.

Startups across the Asia-Pacific and Middle East (APAC and ME) regions are shifting to more conservative hiring and equity practices, moving away from the aggressive expansion strategies seen in 2022. Hiring growth has slowed significantly while employee departures have surged, and employee equity grants have declined by over 30% since 2021, aligning with trends in the U.S., though ESOP sizes remain smaller in APAC and ME. Despite standardized vesting practices and continued growth in headcount at later stages, employee stock option exercise rates have dropped sharply, reflecting cautious employee sentiment amid market uncertainty.

Nexans will launch its 11th employee share offering, “ACT 2025,” in the second half of 2025, allowing employees in 28 countries to purchase shares through a leveraged and secured plan, with a 20% discount on the reference price. This initiative reflects Nexans' ongoing commitment to employee involvement in the company’s performance and will include both direct share subscriptions and participation through company savings plans (FCPE), with a required five-year holding period. The final terms, including the subscription price, will be set on June 20, 2025, and shares are scheduled for settlement and delivery on July 30, 2025.

Employee engagement is at a decade low, with workers feeling increasingly disconnected and uncertain about their companies' futures, prompting experts like KKR's Pete Stavros to champion employee stock ownership plans (ESOPs) as a solution. Stavros argues that ESOPs, when well-implemented, significantly improve culture, engagement, and retention by giving employees a financial stake in their companies, with notable successes like CHI Overhead Doors showcasing life-changing payouts for non-executive workers. However, broader adoption faces barriers such as regulatory complexity and limited accessibility, leading advocates to push for policy reforms while emphasizing that trust, transparency, and genuine cultural shifts are essential for ESOPs to succeed.