NORTH AMERICA CHAPTER

Chair Atkins emphasized that capital formation is essential for U.S. economic growth, turning ideas into businesses and businesses into sources of employment and social mobility, while noting a significant decline in public company listings over recent decades. She outlined three pillars to strengthen markets: focusing disclosures on material information, de-politicizing shareholder meetings, and providing litigation alternatives to protect innovators and investors. Chair Atkins welcomed the INVEST Act and the Empowering Main Street in America Act, highlighting provisions like “test-the-waters” IPOs, modernized accredited investor definitions, and expanded retirement account investment options as tools to encourage public offerings and broaden American participation in capital markets.

The webinar explains how first-quarter bonuses and equity vesting can lead to larger than expected tax bills because standard withholding may not be sufficient. It covers key planning tools for executives, such as safe harbor election rules, making estimated tax payments, and how different types of equity compensation (like RSUs, ISOs, and NSOs) affect tax obligations. The presenter also highlights time-sensitive actions that can help reduce underpayment penalties and better align your withholding with your actual tax liability.

Broad-based employee ownership programs (BBOPs) significantly improve engagement, retention, and business performance, but financial stakes alone are not enough; success relies on three key management practices: financial transparency, empathic leadership, and rigorous measurement of culture and people metrics. By giving employees clear insight into how their daily actions affect business outcomes, fostering psychological safety, and using data to guide people-focused decisions, companies can create a true ownership mindset that drives both individual and organizational success. Even without equity, similar results can be achieved by applying these practices to other forms of shared rewards, such as bonuses, profit-sharing, or career development opportunities.

As 2026 begins, companies face a complex landscape of economic uncertainty, regulatory changes, and M&A activity, making the attraction and retention of key talent critical. Key developments include increased scrutiny of proxy advisory firms, evolving state and federal rules on restrictive covenants, potential SEC amendments to executive compensation disclosure, and new insider reporting obligations for foreign private issuers. In M&A contexts, early planning for executive transitions, equity award treatment, and retention incentives is essential, while companies are advised to regularly review compensation frameworks to balance legal, tax, and governance considerations and maximize long-term shareholder value.

Section 6039 of the Internal Revenue Code requires companies to provide Forms 3921 and 3922 to employees who exercised incentive stock options or first transferred ESPP shares during 2025, with employee statements due by February 2, 2026. Employers must also file these forms with the IRS by March 2, 2026 (paper) or March 31, 2026 (electronic), with electronic filing mandatory for companies submitting ten or more forms of a given type. Failure to file or furnish the forms on time can result in significant per-form penalties, making timely compliance critical for corporations administering equity plans.

As countries implement new regulations affecting global equity and executive compensation for 2026, multinational companies should review their equity plans and grant materials to ensure compliance with updated tax, securities, and employment laws. Key developments include the removal of certain reporting and forced-sale requirements in China, expanded securities exemptions in Japan, new pay transparency obligations in the European Union, updated SEC requirements in the Philippines, and clarified national insurance sourcing rules in the United Kingdom, along with broader global trends such as rising tax rates and limits on restrictive covenants. Proactive coordination among legal, tax, payroll, and equity teams is essential to manage compliance, reporting obligations, and strategic planning in the year ahead.

OpenAI is reportedly paying employees an average of $1.5 million each in stock-based compensation, making it the most generous major tech startup by far and pushing equity pay to nearly half of projected 2025 revenue. The payouts—driven by fierce competition for elite AI talent, especially from Meta—dwarf pre-IPO compensation at companies like Google and Facebook and are projected to add about $3 billion a year in stock costs through 2030. While the strategy helps OpenAI retain top researchers during the AI arms race, it has also significantly inflated losses and highlights how far the company has moved from its nonprofit origins toward an equity-heavy, hybrid commercial model.

Rolling out a global share plan requires careful planning, significant coordination across internal teams, and collaboration with external advisors to navigate legal, tax, securities, payroll, and labour law complexities in multiple countries. Companies must ensure clear communication, tax-efficient design, compliance with local regulations, equal treatment of employees, and practical considerations such as document translation and payroll restrictions to avoid pitfalls. When executed thoughtfully, global share plans can provide real value to both the business and its employees while supporting long-term engagement and compliance.