🪄 Product updates

International Exercise Handler for Global Workforce

No surprise at exercise of the stock options

Introducing Easop's International Exercise Handler for Global Equity Management

In the landscape of international business, startups and enterprises alike are presented with unique challenges in managing equity compensation for their global workforce.

Navigating the complexities of taxation, withholding and reporting obligations relating to equity compensation can be a daunting task.

That's where Easop steps in, offering a solution that takes the guesswork out of equity management. Today, we are excited to introduce a groundbreaking addition to our suite of features: the International Exercise Handler!

Unlocking Clarity and Confidence at Exercise

At Easop, we're proud to be the pioneers in introducing the International Exercise Handler feature. Imagine a tool that empowers both equity administrators and grantees with the knowledge they need to make informed decisions about stock option exercises. No more uncertainty, no more confusion when U.S. and non-U.S. team members exercise their stock options – just clarity and confidence at every step.

We understand that stock option exercises can be complex, especially in an international context. Our International Exercise Handler takes the guesswork out of the equation by generating a complete tax summary tailored to each grantee's situation based on the grantee’s country of tax residence and work relationship.

Spanish example

For example, if a Spanish citizen and EoR employee working from Spain decides to exercise their stock options the International Exercise Handler will inform them that

📊 Tax rates 📈

If their general annual taxable income 💰 is

- between EUR 35,200 and EUR 60,000 the spread (i.e. the difference between the fair market value (FMV) of the shares at the time of exercise and the exercise price) will be taxed at 37%

- between EUR 60,000 and EUR 300,000 the spread will be taxed at 45%

- higher than EUR 300,000 the spread will be taxed at 47%

💡 Potential Tax benefits 💵

30% of the spread may be tax exempt if certain conditions are met:

1. The main condition is that the stock options received cannot be exercised in the first 2 years from the grant date ⏳. This means that the grant documentation needs to be designed in a way that prevents the grantee from exercising the options before 2 years’ time starting from the grant ✋.
(Easop award documentation automatically includes this 2 year commitment ⚙️)

2. The grantee can only use that exemption once in a period of 5 years ⏰ (so this tax benefit could potentially not be applicable if the grantee has exercised stock options or obtained a similar benefit recently, even if the stock options relate to another company) 🔄

3. It’s limited to the first € 300,000 of income 💶. In other words, if the spread is € 400,000, the grantee would only be able to exempt € 90,000 from tax (€ 300,000 × 30%) 🧮

🚨 Potential Watch-outs 🚨

Additional taxation applies, depending on the grantee's residence 🏡, i.e. which autonomous Spanish region they live in 📍

Empowering companies and grantees efficiently

In the fast-paced world of startups and international businesses, time is of the essence. Our International Exercise Handler not only provides unmatched clarity but also streamlines the entire process. Say goodbye to lengthy research sessions and navigating convoluted tax codes. With Easop, you can make strategic decisions swiftly and with confidence.

Easop's International Exercise Handler isn't just about equity administrators – it's about the grantees, too. We understand that exercising stock options is a pivotal moment for any employee or contractor. Our tool ensures that they have all the information they need at their fingertips, from applicable tax rates to potential benefits and crucial watch-outs. This empowerment leads to better decision-making and a more seamless exercise experience.

The International Exercise Handler has been built with external top tier local tax experts in 70+ countries. However, we know that each situation may have their own specificities and therefore sometimes require additional local tax expertise. If this is the case, Easop will connect the equity administrator or the grantee with their local tax experts.

Our clients are at the heart of everything we do, and Catherine Wilkinson’s (Total Rewards & Payroll Lead and Equity administrator for Maze, having done 190+ grants in 35+ countries on Easop) feedback on our International Exercise Handler speaks volumes:

"With Easop’s International Exercise Handler, transparency is ensured for equity administrators and grantees alike. This highly valuable tool streamlines intricate exercises, addressing significant tax considerations and withholding responsibilities with precision."

Join Easop Today

It's time to step into a new era of  management. Say goodbye to uncertainty and hello to empowerment. Join us on this exciting journey as we redefine the way international companies handle global equity compensation. With Easop's Exercise Handler, you'll experience unparalleled clarity, confidence, and efficiency in every stock option exercise.

Visit our website to learn more about the Easop International Exercise Handler and how it can revolutionize your equity management strategy. Your journey to informed stock options related decision-making starts here.

📣 If you'd like to learn more about how Easop could help your organization, request a call with our team.

Try Easop

Next articles