🌎 International equity

Navigating Refresher Grants for ESOPs in a Global Landscape

The landscape of employee stock ownership plans (ESOPs) is complex and multifaceted, especially when you consider the international context. For startup and scaleup companies aiming to retain talent and incentivize employee ownership, understanding the nuances of refresher grants within ESOPs is invaluable.

Introduction to Refresher Grants

At its core, a refresher grant is an additional allocation of stock options or equity awards given to employees, supplementing their initial grant in an ESOP. These grants serve as a powerful tool for companies to retain their top talent and reinforce a culture of ownership among employees.  Refresher grants can be issued at various intervals, such as yearly, upon reaching certain milestones, or when the company experiences significant growth. Additionally, these grants can be performance-based, meaning they are contingent on an employee meeting specific goals or targets.

Exploring Refresher Grants

Why Are Refresher Grants Important for International Teams?

For companies with a global footprint, refresher grants take on additional significance. They allow companies to adjust for different compensation practices and cultural norms, ensuring employees across the world are motivated and incentivized in a manner that aligns with their expectations.

Refresher grants can also help bridge any gaps between an employee's original grant and their current performance or contribution. In essence, they serve as a way to keep employees engaged and motivated as they continue to grow by performing functions such as:

  • Retaining Key Employees: In the competitive landscape of global talent, refresher grants are a persuasive argument for key employees to stay. By offering an attractive equity package, companies can strengthen the loyalty of valuable team members.
  • Motivating Employee Ownership: They cultivate a sense of belonging and investment in the company's success across borders. Employees who receive refresher grants are more likely to have a vested interest in the company's performance and work towards its goals.
  • Enhancing Company Performance: With vested interests in the company's growth, employees are likely to contribute more effectively to its success.

Exploring Global Factors

When structuring refresher grants for an international team, companies must navigate a complex web of factors.

  • Vesting Periods: Different countries may have customary or regulatory expectations about vesting schedules. For example, in Portugal, typical vesting periods for employee stock option range from 2 to 4 years with a 1-year cliff before vesting starts.
  • Distribution Policies: Laws around the world vary widely concerning how and when stock options can be exercised or sold. And because taxation is so different from country to country, those differences could greatly effect the perceived value of the same amount of equity from one country to another.
If you want more details on specific countries, check out our country-by-country breakdown here.

Cross-border Tax Implications

Understanding the tax implications for both the employee and the company is crucial in an international context.

  • Employee Side: Taxes on stock option gains can significantly impact the net benefit for the employee. For example, in Germany, employees must pay income tax and social security contributions on the difference between the exercise price and the fair market value at exercise date.
  • Company Side: The company must consider the employer tax consequences of issuing refresher grants in different jurisdictions. For example, in the United States, certain stock options may be subject to taxation upon vesting or exercise, even if the employee is a non-resident alien. To avoid any potential tax issues, companies must carefully analyze and understand the tax laws of each country where they issue refresher grants.

Implementing Refresher Grants: Best Practices

For companies looking to leverage the benefits of refresher grants effectively, several best practices can be followed.

  • Communication Strategies: Clear and transparent communication about the purpose, value, and mechanisms of refresher grants is pivotal. This can help employees understand the benefits and motivate them to stay with the company longer.
  • Regular Reviews: Regularly reviewing the performance of employees who receive refresher grants is crucial. This ensures that these grants are awarded fairly and according to established criteria, helping to keep employees motivated and engaged.
  • Considerations for Different Countries: As mentioned earlier, different countries may have different tax implications for refresher grants. Therefore, it is essential to have a thorough understanding of the tax laws and regulations in each country where the company operates.
  • Performance Metrics Alignment: Ensure that the criteria for receiving refresher grants are tightly aligned with the company's strategic goals and employee performance metrics.
  • Legal Compliance: Navigating the legal complexities of international ESOPs requires diligence and, often, local legal counsel to ensure full compliance
Of course, Easop is designed to take this pain away.  So if you want to learn more about how we make employee equity faster and easier to manage, get started here.


Refresher grants are a potent tool in the arsenal of international business, offering startups and scaleups a means to reward, retain, and motivate their global workforce. By understanding their intricacies and investing in strategic implementation, companies can foster a culture of ownership that transcends borders and drives collective success.