GEO INSIGHTS

Société Générale has launched its 2025 global employee share ownership program, allowing eligible employees and retired former employees to subscribe to a capital increase under preferential terms, with the subscription period running from June 2 to June 16, 2025. Up to 12 million new shares will be offered at a 20% discount (€35.76 per share), with the capital increase scheduled for July 24, 2025, and the new shares becoming tradable around July 29. The program, the Group’s 32nd of its kind, aims to foster long-term employee involvement and aligns with its broader policy to engage staff in the company’s development and value creation.

Budget 2025 allocates $75 million over four years to tax changes aimed at boosting foreign investment in infrastructure and helping startups attract and retain talent. This includes $10 million to allow deferral of tax on employee share schemes until a liquidity event, easing cashflow issues for employees. Additionally, $65 million is set aside for potential reforms to thin capitalisation rules to encourage debt-financed foreign investment, especially in infrastructure.

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.