Let’s talk about how Deel can make your life easier when it comes to giving equity to employees you’ve hired through their EOR (Employer of Record) solution.
This is something that’s been on my mind lately and I think it’s a really important topic for anyone who’s building a global team.
Ready to make equity for your EOR employees a breeze? 🤯 Deel’s got you covered. Check out how Deel can help 🤝
Equity for EOR Employees: A Balancing Act
Ready to make equity for your EOR employees a breeze? 🤯 Deel’s got you covered. Check out how Deel can help 🤝
As a seasoned professional in the field of global workforce management I’ve seen firsthand how tricky it can be to navigate equity grants for employees working through an EOR.
You want to offer competitive compensation and incentivize your team but you also need to comply with the specific laws of each country where your employees are based.
This is where Deel’s expertise really shines.
The Legal Landscape: A Complex Web
Let’s face it the legal framework for equity grants to EOR employees is far from straightforward.
Think of it like a puzzle with lots of moving parts.
You’ve got the employee’s tax residency the country where they’re employed and the company’s legal structure – all of these factors come into play.
Plus regulations are constantly evolving which adds another layer of complexity.
Here’s the thing: in most cases equity grants to EOR employees are considered “benefits in kind” meaning they’re subject to local employment and income tax.
This is where Deel’s local expertise comes in.
They can help you determine the specific tax treatment in each jurisdiction and make sure you’re compliant with all the relevant regulations.
Co-Employment Risk: A Potential Pitfall
There’s also the issue of co-employment risk.
This is where things get really interesting.
In a nutshell co-employment occurs when two or more entities are seen as jointly responsible for the employment of an individual.
It can lead to legal and financial headaches for your business.
Deel’s legal framework is designed to mitigate this risk by clearly defining the employment relationship and ensuring that the EOR entity is solely responsible for the employee’s employment.
It’s all about creating a transparent and legally sound structure.
Deel’s Equity Solutions: A Toolkit for Success
Now let’s delve into the different types of equity grants that Deel offers for your EOR employees:
1. Performance-Based Bonuses: A Win-Win Scenario
This is where Deel gets creative.
They can structure performance-based bonuses for your EOR employees linking these bonuses to the value of your company’s shares.
This gives you a way to incentivize your team without directly granting them stock ownership.
Think of it as a carefully designed legal dance.
It’s all about striking a balance between incentivizing your employees and managing the tax and co-employment implications.
2. Stock Appreciation Rights (SARs) and Phantom Stocks: Alternative Incentives
SARs and Phantom Stocks are other options that can work well for EOR employees.
They offer a way to tie employee compensation to the company’s performance without actually giving them shares.
Here’s how they differ:
- SARs: Offer the right to receive a cash or stock payment based on the increase in the value of a certain number of shares over a specified period.
- Phantom Stocks: Provide cash or stock bonuses based on the value of a predetermined number of shares paid out at the end of a specific period.
Both SARs and Phantom Stocks are treated as benefits in kind so they will be subject to employment tax and income tax.
However they offer flexibility in terms of settlement dates and payment methods.
3. Equity Grants for Direct Employees: A Seamless Experience
For employees hired directly through your own entities Deel offers a comprehensive platform for managing equity grants.
Their system handles the entire process from grant creation and approval to reporting and compliance.
This is where their platform really shines.
It brings order and clarity to the equity management process allowing you to stay on top of things easily.
4. Partnering with Carta: A Powerful Ally
And here’s where Deel’s partnership with Carta comes into the equation.
Carta is a leading equity management platform that provides a range of tools to simplify equity administration including:
- Cap table management: Keeping track of all your equity grants and shareholder details.
- 409A valuations: Assessing the fair market value of your company’s shares.
- Total compensation: Providing insights into employee compensation including equity grants.
By integrating with Carta Deel gives you access to a powerful set of tools for managing your equity program.
The Benefits of Working with Deel: Beyond Equity
But wait there’s more! Deel offers a lot more than just equity solutions.
Here are some of the other reasons why they’re such a valuable partner for businesses with global teams:
- EOR expertise: They handle all aspects of employment in various countries including payroll taxes and compliance.
- Global payroll solutions: They simplify payroll processing for employees in multiple locations taking care of all the complexities.
- Compliance support: They ensure that you’re adhering to local labor laws and regulations.
- Intuitive platform: Their platform is easy to use and navigate making it a breeze to manage your global workforce.
In a nutshell Deel helps you focus on what matters most: growing your business and building a strong global team.
My Final Thoughts: A Game Changer for Global Teams
Let me tell you working with Deel has been a game changer for me and my clients.
They’ve taken the stress out of managing equity for EOR employees and made it a lot easier to comply with local laws.
I highly recommend you check them out.
They’re a valuable resource for any business looking to grow and scale its global team.
This post aims to offer my personal perspective but remember always consult with a legal or tax professional for advice on your specific situation.
Ready to make equity for your EOR employees a breeze? 🤯 Deel’s got you covered. Check out how Deel can help 🤝