Equity Matters: Navigating Compliance in Global Stock Plans (Webinar Recap)
TL;DR
Compliance is the most expensive mistake you can make with equity. A “we’ll fix it later” mindset can snowball into multi-million-dollar fines, gross-ups, and reputation damage. Watch 8:53 →
Top fix: combine expert administration (outsourcing) with reactive, country-aware tooling (e.g., Slice’s compliance engine) plus employee education. Watch 2:30 →
Early-stage tip: it’s OK to promise equity now and grant later (with the right legal wording) to avoid early compliance pitfalls while your 409A is low. Watch 25:27 →
Who’s on the mic?
Kelly Neider — Growth Lead, Equity Outsourcing at Countsy (25+ years in equity administration).
Maor Levran — Co-founder & CEO, Slice Global (AI-native global equity compliance platform).
Carine Schneider — Founding Partner, Compass Strategic Advisors.
What is Slice—and why it matters
Slice automates global equity compliance by continuously ingesting HR data (e.g., residency, dual nationality), then applying country-specific rules and tax logic in real time, flagging issues as you grant. Integrations include Workday, Rippling, BambooHR, HiBob. Watch 1:44 →
Why Slice was built: compliance was “blind” in practice; lawyers lacked scalable solutions; Slice spent 3 years building a global compliance engine. Watch 4:09 →
The most common (and costly) mistakes
1. Under-investing in employee education
What happens: Confusion about RSUs vs. RSAs, ISO vs. NSO, double-trigger vs. time-vested schedules → bad decisions, support tickets, and tax surprises.
Signals you’ll see: “Why don’t I have anything yet?” on double-trigger RSUs; employees exercising at the wrong time; misfiled 83(b)s.
Fix: Short, role-based explainers + eligibility emails + vesting-day reminders. Track views/quiz completion.
Watch 5:06 →, 32:00 →
2. Assuming US rules apply everywhere
What happens: Filing dates, tax triggers, and withholding at grant are missed overseas (e.g., employees owe tax the day they receive RSUs).
Signals you’ll see: Payroll can’t withhold locally; employees resign/decline awards; EOR/PEO vendor ambiguity.
Fix: Maintain a “country rules” matrix with tax trigger, filings, social contributions, and translations.
Watch 7:40 →, 6:34 →
3. Ignoring dual nationality & employment model
What happens: Treating a Canada resident who’s also a US citizen as “Canada only,” or treating an EOR worker as a direct hire.
Signals you’ll see: Country benefits denied (e.g., Canadian 50% deduction), unexpected W-2 reporting, or T4 issues.
Fix: Pull nationality + residency from HRIS on a cadence (Slice polls every 6 hours) and flag conflicts before grant.
Watch 2:30 →, 6:34 →
4. Data integrity errors in the cap/equity system
What happens: RSUs entered as RSAs; wrong vesting templates; missing grant dates; board minutes not aligned to grants → 409A risk and tax rework.
Signals you’ll see: “Missing grant date” alerts; mismatched counts between source docs and system; auditors escalate.
Fix: Source-doc reconciliation on import/migration; automated validations (instrument type, templates, pricing vs. 409A date).
Watch 12:24 →, 30:36 →
5. “We’ll fix it later” budgeting
What happens: Deferred filings turn into fines + penalties + legal fees + gross-ups (often >10× the avoided cost).
Signals you’ll see: Finance “parks” issues until IPO/M&A; last-minute scramble before secondary sales.
Fix: Treat compliance like security: routine audits, exception logs, and named owners per country.
Watch 8:53 →
6. Plan design doesn’t match the jurisdiction
What happens: Issuing ISOs to non-US staff; using warrants (Nordics) without clarifying incentive vs. financing instruments.
Fix: A jurisdictional playbook that maps preferred instruments (options, RSUs, phantom/virtual) by country culture and tax.
Watch 31:19 →, 36:43 →
Real case studies (watch & learn)
Canada: preserving the 50% stock option deduction
Issue: A US company granted options to Canadian staff, but payroll/EOR and approvals weren’t aligned with the rules that enable the 50% deduction.
Impact: Deal diligence flagged it; potential multi-million tax leakage to employees.
Outcome: Slice flagged structural problems; remediation saved $1.2–$2M in an M&A.
Lesson: Your payroll processor setup and paperwork flow can nullify an otherwise favorable regime.
Watch 10:09 →
UK EMI: the £30M assets threshold surprise
Issue: Company’s balance sheet crossed £30M ~18 months earlier; EMI eligibility voided retroactively.
Impact: Employee tax moved from ~10% to ~50%; company had to gross-up and coordinate six months of communications.
Lesson: Track EMI eligibility metrics (assets, independence tests) continuously, not annually.
Watch 11:16 →
Missing grant date → 409A 13× increase
Issue: Board had approved, but the actual grant never happened in the system. Two and a half years later, the 409A had increased 13×.
Impact: Massive make-whole costs; painful employee relations and audit clean-up.
Lesson: “Board approved” ≠ “Grant executed.” Your system of record must reflect a valid grant date tied to the current 409A.
Watch 12:24 →
RSUs taxed at grant—drivers resign
Issue: RSUs to gig workers in a country where tax is due at grant. Workers couldn’t pay immediate taxes.
Impact: Resignations, operations disrupted; equity design directly affected labor supply.
Lesson: Confirm tax trigger (grant/vest/exercise/sale) before choosing the instrument for each country.
Watch 34:33 →
“We’ll just skip filings” → ~$40M fines
Issue: Company decided not to file required forms or returns and hoped for the best.
Impact: Fines + legal fees skyrocketed; remediation far exceeded the “savings.”
Lesson: Non-compliance accrues compound interest (fines, penalties, counsel, gross-ups, re-filings).
Watch 8:53 →
RSU vs. RSA data entry mismatch
Issue: Company entered RSUs as RSAs and taxed/communicated incorrectly for a long period.
Impact: Employee confusion, incorrect payroll, migration exposed errors.
Lesson: Enforce instrument-specific templates and validations on creation/import.
Watch 30:36 →
How to avoid disasters (playbook)
Goal: Catch issues before grant, prove controls to auditors, and keep employees informed so equity delivers ROI.
1. Foundation: People, process, system
Owners: Finance (policy), Legal (docs), HR (data), Equity Admin (execution), IT/Security (access).
Artifacts: Equity policy, country rules matrix, instrument catalog, source-doc checklist, audit log.
System controls:
Required fields (board approval date, 409A date, instrument template).
Validations (grant date ≤ board approval; instrument-country compatibility).
HRIS syncs (residency, dual nationality, employment model).
Watch 2:30 →, 14:17 →
2. Pre-grant checklist (run every time)
□ Confirm employee location(s) and citizenship(s).
□ Verify employment model (direct vs. EOR/PEO) + payroll mechanics.
□ Select instrument by jurisdiction (option/RSU/phantom/virtual).
□ Map tax trigger (grant/vest/exercise/sale) + withholding path.
□ Tie grant date to valid 409A and board approval entry.
□ Generate country-specific award language and acceptance method.
Watch 28:02 →
3. Early-stage tactic: promise now, grant later
When: Tiny team, low 409A, minimal admin capacity.
How: Offer letter addendum promising X% as of today, “subject to plan docs and approvals,” with counsel-approved language; grant once infra is ready.
Watch 25:27 →
4. Education as a control (not an afterthought)
Cadence:
Welcome packet on grant (2-page explainer by instrument + a 90-sec video).
Vesting-day nudge (what it means, actions, tax).
Pre-exercise checklist for options.
Measure: Completion rates, quiz scores, support ticket reduction.
Watch 5:06 →
5. Continuous monitoring & audits
Dashboards: Red-flag bubbles for: missing grant dates, out-of-date 409A vs. grant date, EMI eligibility metrics (e.g., £30M assets), Canadian option criteria, EOR presence, dual nationality conflicts.
Periodic: Quarterly mini-audits (samples), annual full audit prior to 409A refresh or financing.
Watch 11:16 →, 10:09 →
6. Incident response (when something slips)
Steps:
Freeze new grants in impacted population.
Root-cause analysis (people/process/system).
Quantify exposure (employee vs. employer tax, filings, payroll).
Remediation plan (re-paper, reissue, gross-up if needed).
Clear comms (FAQs + country-specific examples).
Note: Gross-ups often exceed the headline error; plan the cash impact.
Watch 20:05 →
7. Tools that reduce risk
Outsourced equity admin (Countsy): Source-doc reconciliation, platform migrations, day-to-day accuracy.
Watch 14:17 →Reactive compliance engine (Slice): HRIS integrations, dual-nationality awareness, country-specific rules, one-click fixes and affiliate referrals where legal advice is required.
Watch 1:44 →, 28:02 →
Quick answers
Q: What’s the cost of “fix it later”?
A: Often 10x the upfront effort—fines, legal fees, gross-ups, re-filings, and brand damage. Watch 8:53 →
Q: How should startups handle equity pre-infrastructure?
A: Promise now, grant later with precise legal wording; meanwhile set up expert admin + compliance tech. Watch 25:27 →
Q: What causes international equity issues most?
A: Assuming US rules apply globally; ignoring grant-time taxes, EOR nuances, and dual nationality. Watch 6:34 →
Q: Why outsource equity administration?
A: Dedicated specialists prevent errors, reconcile source docs, and scale as grants get complex. Watch 14:17 →
Practical checklist
□ Map where employees actually work + citizenships (plural).
□ Confirm board approvals + grant dates before issuing awards.
□ Validate instrument by country (options, RSUs, phantom, virtual).
□ Confirm tax trigger (grant/vest/exercise/sale) and withholding mechanics.
□ Document employee education (guides, webinars, FAQs).
□ Use reactive compliance tooling + outsourced admin oversight.
□ For early stage: promise now, grant later (with precise legal language).
FAQ
How do I keep global grants compliant without a huge team?
Use an equity outsourcing partner for day-to-day accuracy and a compliance platform that ingests HR data and applies country rules in real time.
Is it OK to grant ISOs to non-US employees?
ISOs are a US tax construct; non-US employees typically don’t benefit. Grant design should be jurisdiction-specific.
Should I delay grants as a startup?
You can promise equity now (with tight legal wording) and grant later when infrastructure is ready—reduces early risk while 409A is still low.
What’s the fastest ROI lever?
Education. When employees understand their awards, they value and utilize them—reducing mistakes and support tickets.
Chapter guide (click to jump)
00:00 Welcome & topic framing — compliance can be the most expensive mistake. Watch →
01:13 Speaker intros. Watch →
01:44 What Slice does & why reactive compliance matters. Watch →
06:34 Hidden global triggers: dual nationality, EOR, taxes at grant. Watch →
08:53 The “we’ll pay the fine later” fallacy ($40M example). Watch →
10:09 Canada option deduction compliance—$1.2–$2M saved in M&A. Watch →
11:16 UK EMI invalidation after £30M threshold crossed. Watch →
12:24 Missing grant date → 409A up 13x; massive gross-ups. Watch →
14:17 Why outsource equity admin (Countsy POV). Watch →
20:05 Making employees whole = gross-ups + payroll/tax ripple effects. Watch →
23:54 Communities & resources (NASPP, etc.). Watch →
25:27 Startup tactic: promise now, grant later (use the right wording). Watch →
30:36 RSU vs RSA data entry mistakes. Watch →
34:33 Rideshare driver RSUs taxed at grant → operational impact. Watch →
36:43 Design instruments by country norms; make equity powerful globally. Watch →