GoGlobal recently launched its Global Equity Solutions, a one-stop service offering that helps companies design, implement and execute equity offerings for their workers and then pairs them with people-first international HR and Employer of Record (EOR) solutions.
Equity compensation is a popular way for companies to attract and retain top talent, foster a sense of ownership among workers and free up cash flow that would otherwise be spent on salaries. It has become increasingly popular to use the benefits of equity not just for direct employees but also for EOR workers and consultants. However, managing the legal and tax implications of offering equity to a varied global workforce can be complicated, expensive and time-consuming.
As part of the launch of GoGlobal Equity Solutions, we sat down with Carlene Perry, GoGlobal’s Associate Director of Total Rewards, to learn more about what you should consider when extending equity to EOR workers, the potential pitfalls to avoid and how we can guide companies through the complexities of cross-border equity compensation for EOR and consultant workers.
Carlene, who led the development of GoGlobal Equity Solutions, has extensive global experience in the equity compliance space working with companies of all stages and sizes to offer equity across a diverse global workforce. She helps ensure that a company’s equity offering for EOR workers and consultants is a win-win for all parties – and does not cause headaches down the line.
So, let’s dive in!
What should companies consider when offering equity to EOR workers?
To effectively consider Equity and EOR as part of the big picture, issuers need to be proactive and strategic before entering into the negotiations of an offer. Asking key questions can help guide this process:
- Should I be granting equity in this country?
- Does granting equity align with our business objectives of the hire?
- Is there a local regulation that may prohibit us from being able to be compliant in our offer?
- Is there a monetary threshold where the cost of compliance for granting equity exceeds the benefit?
- Do we have the necessary language in place in our plan documents to grant equity and to meet the specific requirements of the country our EOR worker is in?
- Are we generally comfortable with the risk of granting equity directly to an EOR worker?
Generally speaking, most companies tend to accept a certain level or risk in favor of granting equity and will have aligned business objectives. However, the local regulations and cost of compliance may stop an issuing company from granting equity.
Overall, taking a strategic approach to evaluate equity can help issuers make informed decisions that align with their business objectives and minimize risk. By asking key questions and carefully considering all factors, issuers can effectively navigate the complexities of granting equity to EOR workers.
What are the potential pitfalls of equity compensation to EOR workers?
There are four main challenges when it comes to granting equity compensation to EOR workers across borders:
- Pairing a long-term incentive with a short-term solution: EORs can serve as a short-term bridge or a long-term solution for companies. However, it can be challenging to reconcile long-term incentives like equity with short-term employment arrangements. Not all EOR workers may be suitable for equity, so issuers must consider their business goals and long-term incentive objectives for each EOR worker.
- Fulfilling local compliance requirements for one or two individuals: In some countries, compliance requirements for equity compensation can be significant for just a few individuals. The risk of non-compliance can be equally unattractive. We aim to provide issuers with an estimate of compliance costs upfront, so they can conduct a cost-benefit analysis before offering equity.
- Increased co-employment risks: Co-employment is always a consideration when hiring under an EOR. Where it exists, there are endless amounts of factors that can contribute to showing a co-employment relationship, including what email the worker has, their reporting structure, title, job description, whether they use a corporate card or not, etc. Equity is seen as one of those factors where, in certain circumstances, it can increase risk both to the issuing company and to GoGlobal.
- Country-specific nuances: EOR is a unique and evolving area of equity compensation, which means there are unique challenges in administration. Issuers must invest time in understanding country-specific nuances and educating workers about equity compensation. This may require additional resources and support from the issuer’s team.
What is GoGlobal Equity Solutions, and how can it guide companies through the complexities of offering equity ownership to their workers around the world?
GoGlobal Equity Solutions is an end-to-end equity compensation service that pairs global equity compensation with Employer of Record (EOR) hiring, simplifying your compliance. Our dedicated equity team, with the help of industry-leading experts, will help you manage the unique complexities of local regulatory and tax requirements – while working with you to design a strategic and compliant global equity offering for a global workforce. We minimize risk, increase knowledge and provide ongoing support for a wide range of equity offerings.
What services does GoGlobal Equity Solutions offer to help companies with their equity ownership programs?
GoGlobal Equity Solutions offers a variety of services to help companies with their equity incentive programs, including helping to identify whether equity is the right tool for your workers and informing on legal and tax implications in the 100+ countries GoGlobal serves. We cover the most popular equity award vehicles including Stock Options (SOP), Restricted Stock Units (RSU), Employee Stock Purchase Plans (ESPP), phantom plans and more.
In doing so, we support and execute mandatory local requirements – from plan registration and disclosures to payroll reporting, tax remittance and country-specific periodic filings.
What makes GoGlobal Equity Solutions different from other equity compensation providers?
GoGlobal Equity Solutions is different because of our top industry leaders and experts, end-to-end support, clear process, transparency and collaboration.
Our team members have deep experience in the equity space and source the latest, most reliable and accurate information from industry leaders. We provide insight from inception and support throughout the lifecycle of your equity offering – including updates as regulations or talent landscape changes.
With GoGlobal Equity Solutions, we ensure equity doesn’t become a headache for your team and can help you through every step of the process.