EUROPEANCHAPTER

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.

Company sales typically trigger employee share awards, creating complexity across different plan types, tax treatments, and jurisdictions, so early planning is essential to avoid disrupting the transaction. Clear, timely communication with employees about how the sale affects their awards, timing, consideration, and tax implications is critical to maintaining engagement and ensuring a smooth transition. Global and regulatory nuances—especially for tax-advantaged plans and cross-border workforces—make structured, well-supported communication and advice key to successful exits.

Stellantis completed the 2025 edition of its “Shares to Win” employee share purchase plan on November 25, marking the third consecutive annual offering since 2023 and spanning 20 countries with over 235,000 eligible employees. The plan features a 20% share price discount and generous matching contributions, helping drive broad participation and reinforcing employee engagement and ownership. Since launch, employees have subscribed to 22 million shares, investing €209 million in total, and now collectively hold 2.8% of Stellantis’ share capital.

ESG metrics have become a mainstream component of executive compensation at public companies, with roughly three-quarters of S&P 500 firms now tying pay to environmental, social, or governance outcomes. Investor pressure, regulatory action, and workforce and consumer expectations are driving this shift, as companies are increasingly judged on how results are achieved, not just financial performance. While ESG-linked pay appears here to stay, compensation teams face the challenge of designing metrics that are material, measurable, auditable, and clearly aligned with business strategy to avoid greenwashing and maintain credibility.

Almost 1,000 Wickes employees will share a £14.1 million windfall from the company’s employee share save scheme, benefiting as the stock more than doubled in value over three years. Staff invested between £10 and £500 a month at a discounted price, with average savers more than doubling their investment and maximum savers potentially making over £22,000 in profit. The scheme rewards employees for their commitment, with many planning to use the payout for home improvements, holidays, and long-term investment.

The Budget made contrasting changes for employee ownership, reducing the capital gains tax relief for shareholders selling to Employee Ownership Trusts (EOTs) from 100% to 50%, which could disadvantage those mid-sale and dampen enthusiasm for EOTs. Conversely, reforms to Enterprise Management Incentive (EMI) share option schemes were welcomed, with expanded eligibility, higher thresholds, longer option terms, and reduced administrative burdens, making EMI schemes more attractive for companies and employees. The inconsistency—cutting incentives for full employee ownership while enhancing tax advantages for EMI share options—has drawn criticism for sending mixed signals about the government’s support for employee ownership.

Over 50 major UK companies, including Vodafone, Diageo, and Wickes, have urged Chancellor Rachel Reeves to make it easier for employees to buy shares in their employers by reducing the mandatory five-year holding period on Share Incentive Plans (SIPs) to two years. They argue that shorter holding periods would increase participation, giving workers a stake in their company while also helping firms attract and retain talent. The move aligns with the Government’s broader goal of encouraging ordinary people to invest and creating a more financially engaged workforce in the UK.