Stock and Share Incentive Plans

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Spanish Tax Reform: new developments on the taxation of employee benefits

The Spanish government is proposing to implement major tax reforms that will affect the tax efficiency of providing employee benefits to Spanish employees. The changes are due to come into effect on 1 January 2015 but some will have retrospective effect. The key proposals, which are subject to change as the legislation passes through Parliament, … Continue Reading

Don’t trust to luck: EBT settlement facility to be withdrawn

HMRC has announced that the settlement facility for employee benefit trusts (EBTs) will be withdrawn from 31 March 2015.  The facility was offered from April 2011 for employers who set up EBTs that HMRC considers are caught by the “disguised remuneration” legislation introduced in the 2011 Finance Act.  This was aimed at the use of EBTs … Continue Reading

The Sports Direct 2015 Bonus Share Scheme: an unexpected answer

When Sports Direct’s controversial new share plan was approved by shareholders earlier this month, we were still left with the burning question of how much of the very large potential pay-out was going to be allocated to the Executive Deputy Chairman, Mike Ashley.  Sports Direct have announced a very unexpected answer – he will not … Continue Reading

IRS confirms no acceleration of US tax for some stock plans

The IRS has confirmed that stock-based plans of non-U.S. employers under which options and stock appreciation rights are settled in stock do not result in acceleration of income for US tax purposes.  However,  the ruling also confirmed that stock appreciation rights that may be settled in cash can result in acceleration of income for employees … Continue Reading

The Silver Lining in Fifth Third Bancorp v. Dudenhoeffer?

The U.S. Supreme Court’s decision in Fifth Third Bancorp v. Dudenhoeffer eliminates an ESOP fiduciary’s presumption of prudence in relation to the holding employer securities.  Many have viewed this decision with horror.  However, my perspective is that the “revised” pleading standards articulated by the court will actually be a significant silver lining for ESOP fiduciaries. … Continue Reading

Profit participation rights may be taxed as income in Germany

Within the scope of employee equity participation in Germany, it has been controversial whether income from capital commitments is either partly or entirely to be taxed as employment income or a capital gain.  In a recent decision, the German Federal Fiscal Court (Bundesfinanzhof, BFH) has now clarified that value derived from profit participation rights (Genussrechte) … Continue Reading

Australian Draft Tax Ruling on Employee Remuneration Trusts

On 5 March 2014 the Australian Taxation Office released a draft ruling relating to the tax treatment of employee remuneration trust arrangements. In the past, the Commissioner of Taxation has issued various private tax rulings on employee remuneration trust arrangements which had allowed income tax deductions for employer contributions to employee remuneration trusts. Many of … Continue Reading

The brave new world of “simplified” employee share plans

The parts of the UK Finance Bill relating to share plans came into force yesterday, finally implementing many of the recommendations of the Office of Tax Simplification in this area. The main thrust of the new regime is online registration and self-certification of plans and filing of annual returns, of which more details are given in … Continue Reading

Partly paid employee shares – tribunal upholds favourable tax treatment

Before the financial crisis it was relatively common for UK private companies to use partly paid shares to incentivise key members of staff. Under these arrangements shares were issued to recipients for market value by the company but the subscription price was left outstanding on the terms that it could be called up on the occurrence … Continue Reading

UK Budget 2014 – all quiet on the share plans front

Today’s Budget was notable for the absence of announcements relating to employee share plans. So, despite the calls for it to be abolished, employee shareholder status lives to fight another day. This is perhaps not surprising given the enthusiasm George Osborne showed for the concept when it was first announced. As we have commented, ESS … Continue Reading

Well, I declare! Self-certification of UK tax-advantaged share plans

If your company operates one of the UK tax-advantaged share plans, you will probably already have heard that new “self-certification” rules are being introduced from 6 April this year, as we reported in our post when the draft Finance Bill was published in December. HMRC have still to announce their final word on the changes, … Continue Reading

US Companies Get Ready to React: ISS Launches QuickScore 2.0

On February 18, 2014, Institutional Shareholder Services (ISS) launched an updated and enhanced version of its governance and risk assessment tool for Russell 3000 companies – “ISS Governance QuickScore 2.0” (QS 2.0). Some of its new features include a new monitoring system that will be event-driven, whereby ISS will track certain regulatory filings (eg the … Continue Reading

New UK Executive Remuneration Resource Centre

We have changed the way you can access information about UK executive remuneration through the blog site. The Remuneration Tracker document has been replaced by a UK Executive Remuneration Resource Centre. The Resource Centre has all the information and links that you could find in the old Tracker document but we have taken the opportunity to … Continue Reading

Squire Sanders advises Australian government on reform of employee share scheme tax rules for start-ups

The newly elected Australian Coalition Government has commenced direct consultations with interested stakeholders to review the taxation of employee share schemes for start-up companies, following significant public and political impetus for legal reform in this area. They have stated that they are committed to reforming this area of the law in order to assist start-up … Continue Reading

Holiday gift from NASDAQ

NASDAQ has filed amendments to its rules on compensation committee composition. In a welcome move, the revised rules are closer to the more flexible rules adopted by the New York Stock Exchange. The changes come into effect immediately so NASDAQ companies that have already changed their compensation committee charter to comply with the changes NASDAQ … Continue Reading

A warning shot across the bow for the Aurizon Board – the Two Strikes Rule in practice

Last month we brought you an evaluation of the controversial ‘two strikes rule’ (2S Rule) (found here) and how it has affected executive remuneration resolutions at this year’s AGM season in Australia. In our previous blog post we highlighted the number of ways in which the 2S Rule can be utilised by shareholders for reasons … Continue Reading

Oracle’s Larry Ellison and Where is Say-on-Pay Headed in 2014?

On October 31, 2013, shareholders of Oracle Corp. voted “no” to CEO and founder Larry Ellison’s pay package worth $78.4 million (which is actually down 18 percent from the $96.2 million package he received a year earlier for which he also received a “no” vote by Oracle shareholders) (see Oracle Form 8-K filing).  Approximately 56.3 percent of … Continue Reading