Global Equity Rewards Matrix – Tool to Identify Potential International Tax Consequences for Equity Compensation

April 2017

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BDO’s Compensation and Benefits practice has launched a global equity rewards matrix, available both online and as a mobile app, to provide information about the issuance of equity compensation – such as restricted stock and stock options - to individuals around the world. The matrix can be used for scenarios such as evaluating key points that companies need to think about when considering the issuance of equity compensation in a new country.  Boards, particularly compensation committees, may wish to encourage their management teams to review this tool to aid in risk management of global compensation practices. Often decisions about executive compensation are made without regard to foreign implications simply because of unfamiliarity with such implications, resulting in potentially negative consequences and missed opportunities for optimization.

The rewards matrix tool contains country-specific outlines that describe the key income tax, social tax, withholding and reporting requirements by type of award for both the company and employee, including:
  • Restricted stock
  • Restricted stock units
  • Stock options
 
“In an increasingly globalized world, the potential tax consequences for an organization in such scenarios can vary greatly, depending on the design of their equity, administration and many other factors. Users can filter by country and tax area for a high-level overview of considerations.” - BDO Global Equity Team Co-Chair Jessica Pancamo

The rewards matrix is a high-level tool which helps companies define potential risks and consider opportunities when designing compensation globally. The tool can also be used when consulting with advisors to:
  1. Implement a specific country plan to reduce employee and/or employer taxes, social taxes and an employer’s global cost of issuing such awards.
  2. Prepare local country filing requirements.
  3. Find solutions to more complicated matters that result from issuing awards such as mobile employee considerations, payroll issues and local country corporate tax deductions. 
     
Learn more about the Global Equity Rewards Matrix at an upcoming webinar on April 10, 2017 at 12PM ET, titled: Compensation Committee - How Is Your Organization Managing Your Global Equity Compensation Risk? To register for this program or view the subsequent archived recording, refer here.
 

For more information please contact Jessica Pancamo, BDO Global Equity Team Co-Chair