Global Shifts in Equity Compensation: What’s changing, what’s risky, and how to stay compliant
Equity compensation is one of the most powerful tools to hire, retain, and align employees. But once you grant equity outside a single country, the rules stop being “standard” and start being highly local.
In this Navigating Equity Compensation webinar, Kelly Neider (Countsy) and Don-Tobias Jol (Baker McKenzie), moderated by Carine Schneider (Compass Strategic Advisors), walk through the most common global equity pitfalls and what’s changing in key jurisdictions.
If your company is expanding internationally, hiring remote talent, or supporting employee mobility, this guide will help you identify the real risk points and build a more scalable equity function.
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Why global equity gets messy fast
Most equity programs are designed with a home-country mindset. The problem is that equity taxation, reporting, and labor rules can change based on:
Where the employee works
Where the employee is tax resident
Where the company has obligations
What type of award you grant (options, RSUs, shares, warrants, etc.)
When the taxable moment occurs (grant vs vest vs exercise vs sale)
Whether local rules treat gains as employment income or capital gains
Even “just a few employees abroad” can create disproportionate risk.
The two biggest global equity mistakes (and how to fix them)
Don-Tobias summed it up simply: global equity problems usually come from two gaps.
1) Not tracking where employees actually are
It’s not enough to know where someone was hired. You need to know where they’re working now and where they’ve been working during the life of the award.
This became even more visible after the pandemic, when employees worked from wherever they could. But it’s still a major issue today for startups and scaling companies as they open new markets or allow flexible remote work.
What to do:
Treat employee location tracking as a core compliance workflow, not a one-time HR note.
Define internal triggers: “30/60/90 days in a different location” should prompt review.
Align HR, payroll, equity administration, and legal so location changes don’t slip through.
2) Not tracking how quickly laws change
Equity rules can change due to:
New legislation
Updated tax authority guidance
New court decisions (case law)
Something compliant last month may be questionable this month.
What to do:
Subscribe to key resources (professional associations, law firm updates, vendor newsletters).
Build a recurring review cadence for “countries where we have people.”
When in doubt, ask for targeted advice early rather than cleaning up later.
Country updates discussed in the webinar
Below are practical takeaways from the discussion across several commonly used markets for US and global companies.
France: Management packages and reclassification risk
France has been tightening how it treats certain “management package” outcomes, especially where equity-like instruments are granted in connection with someone’s role and duties (rather than purely as an investment).
Why it matters: Where gains are taxed can shift from something like “capital gains style” treatment toward employment incometreatment, which may materially change the tax outcome.
Practical takeaway: If you’re issuing equity (or equity-like instruments) to senior leaders in a French context, especially in private equity / management participation scenarios, assume classification will be scrutinized. Get local review of how the plan is documented and how the economics work.
Germany: When a transfer is a gift vs compensation
A German court decision addressed situations where company owners transfer shares to senior employees as part of succession/continuity planning.
Why it matters: The treatment can depend on facts, including whether the employee truly receives “free ownership” or is subject to obligations that change the character of the transfer.
Practical takeaway: If you’re doing founder succession planning, management participation, or leadership retention grants in Germany, don’t assume it’s automatically treated as wages. Design details matter.
Israel: Ordinary income vs capital gains, plus withholding/reporting
Israel remains one of the most important equity jurisdictions for tech companies, and it’s also one of the most misunderstood, especially when teams move between Israel and the US.
The discussion highlighted updated guidance around:
How employee share sale income may be classified (ordinary income vs capital gains)
How withholding and reporting apply at realization (sale)
Practical takeaway: Israel requires a disciplined approach: correct plan setup, tracking, and execution steps matter. And if you have Israel ↔ US mobility, you should expect complexity in residency, sourcing, and timing.
United Kingdom: PISCES and private market liquidity
The UK’s PISCES initiative (Private Intermittent Securities and Capital Exchange System) is aimed at creating more structured liquidity access for private company shareholders, including employees, through intermittent auctions.
Why it matters: Liquidity is one of the biggest challenges in private company equity programs. A more formalized mechanism can change how private companies think about employee outcomes and exercise/settlement triggers.
Practical takeaway: If you’re a UK private company (or have UK employees) and you want to support employee liquidity in a compliant way, keep an eye on how these mechanisms evolve and how equity plans can reference them.
Italy: Investment risk is key
A tax ruling discussed the idea that if managers receive shares/instruments without contributing capital (and without bearing real investment risk), the outcome may be treated more like compensation than a financial investment.
Practical takeaway: If you’re structuring management participation plans in Italy, expect scrutiny on whether there is real downside risk and genuine investment characteristics.
Netherlands: Wealth taxation uncertainty and startup impact
The Netherlands has been dealing with ongoing changes around how “wealth” and returns are taxed, and that can have real implications for employees holding shares after awards become personally owned.
Practical takeaway: For employees holding private company shares, changes in wealth/return taxation frameworks can create surprise tax exposure, especially when shares are illiquid. Plan education and local guidance become even more important.
Employee mobility: the hidden driver of global equity risk
One of the most useful parts of the conversation: mobility is often the trigger that turns a manageable equity program into a compliance problem.
Common scenarios:
An Israeli founder relocates to the US for 12 months to open a market
A UK-based employee spends extended time working in the EU
A US employee becomes a long-term remote worker from another country
Why it matters: Residency and tax treaties can affect which country taxes what, and when. If two countries both argue someone is a resident, you can quickly end up with double-tax headaches.
How to educate employees without overwhelming them
Kelly’s guidance was simple: don’t assume employees understand equity, and don’t leave them alone with Google.
Practical employee education methods that work:
One-page “equity snapshots” (simple language, visuals, checklists)
FAQs and short videos in the employee portal
Lunch-and-learns / webinars timed to vesting or liquidity events
Clear “where to start” guidance for taxes (especially internationally)
The goal: equity should feel like a benefit, not a surprise tax problem.
A scalable playbook for startups and scaling companies
Most companies don’t have a dedicated international stock plan team. That’s normal. What matters is having a repeatable system.
Minimum viable global equity ops
Location tracking: consistent and auditable
Country coverage map: where you grant today + where you may hire next
Policy decisions: which instruments you will/won’t use by country
Vendor + advisor support: clear handoffs, documented responsibilities
Employee education: simple and consistent
If you’re trying to scale without building a large internal team, equity outsourcing can help you formalize these systems while staying lean.
FAQ
What is the biggest risk in global equity compensation?
The biggest risk is not knowing where employees work and where they are tax resident, because that determines withholding, reporting, and taxation across jurisdictions.
How do global equity rules change over time?
They change through new legislation, tax authority guidance, and court decisions. A plan that was compliant recently may need updates after legal changes.
Can a company use the same equity instrument in every country?
Sometimes, but it’s risky. Some countries treat certain awards differently, trigger tax earlier than expected, or create employee cash-flow problems.
How should startups educate employees about equity taxes internationally?
Use simple one-pagers, FAQs, and short training sessions. Make sure employees know what triggers taxes (vesting/exercise/sale) and where to get help.
When should a company get local legal or tax advice?
Before you grant equity in a new country, when employees relocate internationally, and before liquidity events. Fixing issues after the fact is typically more expensive.
Jump to a Section of the Webinar
0:00 – Welcome & Webinar Overview
0:38 – Speaker Introductions – Kelly Neider, Don-Tobias Jol, Carine Schneider
1:19 – Why Global Equity Compensation Is So Complex
5:15 – The 2 Biggest Global Equity Mistakes (Mobility + Legal Changes)
7:35 – How Small & Mid-Size Companies Can Stay Compliant Internationally
9:39 – Executive Design Risk: One Equity Instrument Doesn’t Fit All Countries
11:18 – France Update: Management Packages & Reclassification Risk
15:15 – Germany Update: Gift vs Compensation Decision
17:01 – Israel Update: Ordinary Income vs Capital Gains + Withholding
20:07 – Employee Mobility & Tax Residency Risks (US ↔ Israel Example)
24:37 – United Kingdom Update: PISCES & Private Market Liquidity
27:42 – Italy Update: Investment Risk & Compensation Classification
29:50 – Netherlands Update: Wealth Taxation & Startup Implications
37:48 – Educating Employees on Global Equity Compensation
40:53 – Why “It’s Just One Employee Abroad” Is Risky
41:04 – Real-World Enforcement Example (Japan Case Study)
42:06 – Final Takeaways & Closing