At our NASPP Sacramento Chapter meeting last Thursday, Jean Wong of Sun Microsystems said that in order to talk about global stock plan administration, you really do have to address the issue of global mobility. Global mobility truly is an issue that can impact all of your company's stock plans. You may see it mentioned in presentations, articles, discussion forums, and even in opinions from your tax advisors. In fact, if you are looking for the latest information on global mobility, don't miss the Traveling with Equity session at our Conference this year!
Whatever the context, there are some basic terms that are commonly used when discussing global mobility. I thought I'd take a moment to provide a short general glossary. Keep in mind that these terms may be used differently by some companies, and that many companies use their own nomenclature to describe situations and individuals internally. I tried to give the most general definition to the terms below; there may be situations where these terms are used in other ways. This short glossary is intended only to help you understand what you are hearing or reading when it comes to global mobility. Always consult your company's tax advisor when making decisions about tax withholding and reporting.
Cross-Border Employee: Cross-border employees are either mobile employees (see below), or employees who live in one tax jurisdiction, but work in another.
Domestic Employee: Domestic employees live and work in one country and are citizens or residents of that country.
Expatriate: Expatriates are individuals who live and work outside their home country. Typically, "expatriate" is a term used by the home country for an individual who has left the country to work internationally. The host country would refer to the same individual as a foreign expatriate.
Foreign Expatriate: Foreign expatriates are employees who have left their home country to live and work in another country. Typically, this term is used by the host country for an individual who has come to the country to work domestically. It is also used by the U.S. to refer to expatriates whose home and host countries are both a country other than the U.S.
Foreign National: Foreign nationals are employees who live and work internationally, but remain in their country of citizenship or residency.
Home Country: This is the country where the employee is based. Typically, it is the country of citizenship or residency. There are situations where an employee is on assignment long enough that a new home country is established.
Host Country: This is the country in which the employee is working other than their home country. Some employees have multiple host countries during their employment with one company.
Mobile Employee: Mobile employees are those that work for the company in more than one tax jurisdiction over the period of employment with the company. These may be domestically mobile or globally/internationally mobile employees.
I'd like to give a special thanks to Lauren Downes for this idea! Stay tuned next week for common terms used specifically in the United States.
The NASPP Brings You the Experts
When we say we're putting together a panel of experts to answer member questions, we're serious about the experts. Valerie Diamond of Baker & McKenzie and Jon Burg of Radford--half the panel in our recent "Ask the Experts: Modifications of Equity Awards" webcast--were quoted extensively this week in the article "Options Exchanges Help to Generate Legal Work," published in The Recorder and on Law.com. And, Thomas Welk, also one of the webcast panelists, discusses simultaneous acceptance of grants issued in a option exchange in this month's SOS Xtra (published by Stock & Option Solutions).
Listen to the audio archive of the webcast or read our panel's answers to the questions that were submitted.
-Rachel