Elif Kowalski· Director, Total Rewards, Cardinal Insurance
Asked in Global & Mobility ·
We are a listed software business, about 2,400 employees in 19 countries, and we are extending our RSU plan below director level for the first time. That brings in 46 people in Ho Chi Minh City and 28 in Lagos.
Our share plan administrator says both countries are difficult for share delivery: registration requirements in one, and exchange controls and repatriation of sale proceeds in the other. Their suggestion is cash-settled units tracking the share price.
I would rather not create a second-class plan. Has anyone delivered real shares in either country, and was it worth the effort for under 80 people?
5 helpful · 1 insightful · 4 replies · 85 views · 6 following
Accepted answer· by Petra Lindqvist
For populations this size we use cash-settled units and I no longer think of them as second class. Same grant value, same vesting, same vest-date price, paid through local payroll in local currency the month after vesting. Employees often prefer it: no foreign brokerage account and tax withheld at source. Two things to check. The accounting is different, because cash-settled awards are remeasured each period, so your finance team needs to agree. And put a line in the plan rules allowing you to switch to share settlement later if the headcount grows to the point where registration is worth it. Our threshold is about 150 participants in a country.
Read in the conversation ↓
Benefits Analyst, Larkspur Manufacturing
We deliver real shares in Vietnam. The plan had to be registered with the central bank before the first grant, which took about five months and local counsel, and there is periodic reporting afterwards. Proceeds have to come back through a specific route. It is manageable once set up, but allow the lead time or your first vest will arrive before the approval does.
Benefits Analyst, Lumen Biosciences
Accepted answer
For populations this size we use cash-settled units and I no longer think of them as second class. Same grant value, same vesting, same vest-date price, paid through local payroll in local currency the month after vesting. Employees often prefer it: no foreign brokerage account and tax withheld at source.
Two things to check. The accounting is different, because cash-settled awards are remeasured each period, so your finance team needs to agree. And put a line in the plan rules allowing you to switch to share settlement later if the headcount grows to the point where registration is worth it. Our threshold is about 150 participants in a country.
VP, Total Rewards, Meridian Health Systems
In Nigeria our issue was less the plan than the exchange rate. When the naira fell sharply, the local currency value of a vest jumped, which was welcome, but the tax on it did too and people had not planned for it. Whatever you choose, explain the tax at vest clearly and early.
Samir DelaneyCBS, CEP
Senior Compensation Analyst, Silverline Media
