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Top Trends in Global Stock Plans

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September 22, 2015 | Barbara Baksa

Top Trends in Global Stock Plans

We recently posted the executive summary to the NASPP and PwC 2015 Global Equity Incentives Survey and, later today, we will be presenting highlights of the results in our webcast, "Top Trends in Equity Plans for International Employees."  For today's blog entry, I highlight five findings that I think are significant:

Globalization Continues:  Back when we did the 2012 survey, 20% of respondents said they expected to increase global participation in their stock plan and this trend held steady in 2015, with 19% again expecting to increase participation.  In addition 77% of respondents said they expect global participation to remain the same.  That leaves only a very small percentage of companies that expect to pull back their global stock plans.

Compliance Reviews Are More Routine:  The percentage of respondents who said they conduct annual compliance reviews of their global stock plans increased to 43%, up from 34% in 2012.  At the same time, respondents conducting only sporadic reviews dropped to 40%, down from 45%.  It can be risky to wait until you hear about a regulatory change to conduct a compliance review; annual reviews help ensure that you know when the laws impacting your global stock plan have changed.

UK Takes the Lead in Challenging Tax Compliance:  We asked respondents to indicate which countries they found to be challenging in terms of tax compliance. The UK was first, with 46% of the votes, up from 36%  (third place) in 2012.  China, however, is hanging in there at second place with 42% of the votes (China was in first place in 2012). France dropped to third place, with 26% of the votes (down from second place and 38% of the votes in 2012).

Mobility Compliance Up:  The percentage of respondents tracking mobile employees continues to increase:  87% of respondents track formal assignees (up from 80% in 2012), 62% of respondents track mobile employees who aren't part of an assignee program (up from 60% in 2012), and a surprising 27% track business travelers (up from 18% in 2012). But the tools for tracking mobile employees still leave something to be desired: 36% of respondents track this in an Excel spreadsheet, up from 29% in 2012.  About another third (32%) outsource tracking to a consultant or TPA. The final third use a hodge podge of methods.

Participant Understanding Looks Like a Mountain Rather Than a Bell Curve: Only 34% of respondents felt that their global participants understand a good deal or completely understand their stock plan benefits. That leaves a two-thirds majority for whom participant understanding is at best, somewhat or partial. Global stock plans are a very expensive employee benefit, both in terms of the P&L and administrative cost.  It seems a little crazy to invest resources like this in a plan and not also invest in the education to make sure participants understand it.

Be sure to tune in to the webcast later today to learn more highlights from the survey.

- Barbara

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