During these unprecedented times, companies are facing a lot of commercial uncertainty. The impacts of COVID-19 are far-reaching and fast-moving and incentive plans do not escape the consequences.
In some countries these changes have impacted:
- Reporting: filing and reporting may continue to be required but practically is this still possible? What are countries doing to assist companies in meeting their compliance requirements?
- Salary deductions: Governments are assisting in funding wages, but does this impact payroll deductions or wage withholding?
- Dividend payments: regulators are requesting dividend payments to be suspended, but do companies have the ability to do so?
With all of these changes taking place all over the world daily and at a high pace, the task of keeping up (both maintaining compliance and grasping opportunities) is enormous!
... so how can we help?
Now more than ever is the time for community and coming together, and we want to help as much as we can.
We have been working with our global community of incentive lawyers to look at the impact on share plans around the globe. Each week we will be sending updates to our clients and subscribers with a weekly COVID-19 Catch Up of key global updates and impacts on incentives to keep you as up-to-date as possible.
China - SAFE Filings: China are accepting quarterly filings which have been made late.
This is helpful during a time where companies are struggling to get documents reviewed and signed but filing on time is, of course, preferred if possible.
EU - Financial Services: the regulators in both Germany and the UK have given strong guidance to banks that they should not pay dividends at this time.
In a time where cash is king, this will be unsurprising news to most but unwelcome to some. Communicating this to participants in the context of their awards will be key.
Luxembourg - Deferral of Tax Filing: the filing date for tax returns has been postponed to 30 June, 2020.
This takes some pressure off companies whilst they try to meet their compliance requirements. Companies should think of preparing filings ahead of time to avoid delays in case there are still practical difficulties in June.
Thailand - Securities laws: The Thai Securities Regulator is now accepting scanned copies of signed forms for filings where they normally ask for originals.
This is definitely welcome to avoid delays. As we are currently unsure whether regulators will later require originals, it is important that companies keep a copy of the original signed documents.
USA - Employee support: the CARES Act has provisions for payroll loans to employers to incentivise employers to keep employees employed. The loan has to be used for payroll, rent and utilities and the loan is provided tax-free if certain conditions are met.
Whilst this does not directly impact incentive plans, this is a welcome benefit during these times of uncertainty. The terms of these loans should be reviewed to ensure they meet the conditions to be offered tax-free.
The Tapestry Team are always available if you would like to speak to us about any of your countries and operating your share plan globally during this time, so please do get in touch.
We are also running a series of webinars on key issues affecting global share plans and will be launching a 'Spring into Spring' series of webinars shortly to do a deep dive into some of the topics which we think may be helpful to you at this time.
Lorna Parkin and Sally Blanchflower