GEO INSIGHTS

The UK government is launching PISCES, a new regulated marketplace allowing periodic secondary trading of private company shares, primarily for sophisticated investors, employees, and select insiders. New legislation will enable employee stock options under EMI and CSOP schemes to be exercised during PISCES trading events without losing their tax benefits, addressing liquidity challenges in private markets. PISCES also offers advantages like Stamp Duty exemptions, lighter disclosure requirements, and greater flexibility, potentially providing private companies with a new pathway toward liquidity and eventual public listing.

Two new Senate bills aim to strengthen employee stock ownership plans (ESOPs) by removing certain contribution limits and giving ESOPs formal representation on the ERISA Advisory Council. The Employee Ownership Fairness Act proposes excluding ESOP contributions from defined contribution plan caps to allow employees more flexibility in retirement savings, while the Employee Ownership Representation Act adds two ESOP advocates to the ERISA Council. Separately, the American Ownership and Resilience Act was introduced to promote selling American businesses to employees through ESOPs, helping prevent offshoring and support domestic manufacturing.

The Employee Ownership Fairness Act of 2025, introduced in Congress, aims to ease tax limitations that have hindered ESOP-owned companies from fully funding both ESOPs and 401(k) plans. The bill proposes that stock contributions and ESOP loan repayments no longer count toward annual contribution and allocation limits, allowing employees to maximize benefits in both retirement plans. This change would benefit companies, selling shareholders, and employees alike by removing outdated tax barriers and supporting broader employee ownership and retirement savings.

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.