The German Federal Labor Court (Bundesarbeitsgericht – BAG) has issued two new decisions impacting virtual stock option plans (VSOPs). In a March 19, 2025 decision (BAG, March 19, 2025 – 10 AZR 67/24), BAG ruled that virtual stock options (“phantom shares”) are not speculative options/opportunities, but rather part of the remuneration already earned and, therefore, forfeiture clauses in VSOPs are invalid. The new decision is a reversal of the court’s prior position on these virtual shares. In the other new decision, issued on March 27, 2025 (BAG, March 27, 2025 – 8 AZR 63/24), BAG ruled that phantom shares exercised while an employee is still employed have to be considered when calculating the compensation owed for the employee’s compliance with a post-contractual non-compete covenant. Below is an overview of the new cases and steps employers can take to ensure their plans are in compliance.Continue Reading German Federal Labor Court Rules on Phantom Shares; What Employers Need to Know
As U.S. companies expand internationally, they often wish to compensate their non-U.S. employees with stock options, restricted stock, phantom stock and other forms of equity compensation. But offering equity compensation to non-U.S. employees is not as straightforward as it may sound, and is often more complicated than it is at home. U.S. companies venturing into the world of global equity compensation confront a complex, cross-border web of rules and regulations, which can vary markedly from country to country.
In this article, we highlight five critical questions that can help U.S. companies navigate common legal pitfalls in the global equity space. These questions focus on some of the most rapidly evolving areas of law, including securities, exchange controls, data privacy, tax and foreign account reporting, and labor and employment.Continue Reading 5 Questions You Should Ask About Your Global Equity Awards