Ximena Hoffmann· VP, Total Rewards, Meridian Health Systems
Posted in Global & Mobility ·
We had an expensive surprise this year. A sales director was granted restricted shares while working in France, moved to our US office after a year, then to Singapore. When the award vested, part of the gain was taxable in all three countries in proportion to the time worked in each during the vesting period.
Nobody had tracked her work locations against the grant. Payroll in Singapore withheld on the full amount, France was missed altogether, and we found out 14 months later. With penalties and adviser fees it cost about EUR 85,000 for one employee. We are a semiconductor company of about 3,700 people with roughly 600 plan participants.
We have since found 43 participants who have changed country during a vesting period.
0 reactions · 3 replies · 4 views · 3 following
Director, Total Rewards, Cardinal Insurance
Of the 43, look first at anyone who left a country with an exit charge or with specific rules for share awards on departure. We had two cases where tax arose at the point of leaving, not at vest, and the employee had no cash to pay it. We took advice and ended up lending the amount against the future vest.
Tessa IversenCBS, CEP
Compensation Manager, Lumen Biosciences
We had the same thing with business travellers, not only formal transfers. The fix was dull: the HR system now passes every change of work country to the share plan administrator monthly, and their mobility module calculates the split at vest. Setup took about six months and the cost was small against one incident like yours.
Maya ChenWWP
Compensation Manager, Halcyon Financial Group
Who bears the extra tax in your policy? Ours says the employee is responsible unless the move was company-initiated, in which case equity income is equalised to the home country. Writing that down before the vest avoids an argument at the worst moment.
