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U.S. Equity Compensation Grants to Foreign Employees: Structuring and Reporting Options

Tax Impact of U.S.-Sourced Non-Qualified Options and Grants of U.S. Parent's Shares to Foreign Subsidiary Employees

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Wednesday, June 14, 2017

Recorded event now available

or call 1-800-926-7926

This course will provide corporate advisers with a practical and comprehensive guide to the tax and other implications of granting compensatory stock options to nonresident employees.


As U.S. companies continue to expand globally, they are increasingly offering equity-based compensation to employees located outside the United States. Grants of options or other equity-based compensation can create multiple cross-border issues for both the U.S. firm and the foreign employee.

For employees of foreign subsidiaries, equity compensation from the U.S. parent creates still more complexities. Parent grants to foreign employees are often “pushed down” to the subsidiary, which enters into a “recharge” agreement with the parent. Depending on the structuring of the recharge agreement, the grant can create both tax and transfer pricing implications for the U.S. parent.

Listen as our experienced panel provides a thorough and practical guide to the tax treatment of equity compensation grants to foreign employees by U.S. companies.



  1. Treatment of non-qualified stock option grants from U.S. company to non-U.S. employee
    1. Sourcing of income
    2. Timing of U.S. and foreign company tax
    3. Foreign tax credit
    4. Impact of tax treaties
  2. Grant of equity shares of U.S. parent company to employees of foreign subsidiary
  3. Recharging agreements
  4. Transfer pricing implications


The panel will discuss these and other important issues:

  • U.S. income sourcing methods for non-qualified options granted to non-U.S. employees
  • Withholding requirements on U.S. companies on U.S.-sourced equity grants to non-U.S. employees
  • What is a “recharging agreement” and how does it work in the context of U.S. parent company grants of equity compensation to employees of foreign subsidiaries?
  • Tax impact of recharging on parent company
  • Restricted stock units and other forms of equity compensation
  • Tax qualified plans on a global basis
  • Legal and regulatory issues in relation to global grants - including securities laws; exchange controls and data protection
  • Global remuneration regulations affecting equity plans
  • Documentation for global plans and how to avoid too many versions


Ian Fraser
Ian Fraser

Simmons & Simmons

Mr. Fraser has significant experience advising businesses on all aspects of employee incentives. This work...  |  Read More

Bob Grayson
Bob Grayson

Tapestry Compliance

Mr. Grayson manages the Firm's global legal and tax compliance for all types of share plans, incentives and...  |  Read More

William D. Wright
William D. Wright

Fisher & Phillips

Mr. Wright is Co-Chair of the firm's International Employment Practice Group. He counsels employers on various...  |  Read More

Tanner, Craig
Craig P. Tanner

Reed Smith

Mr. Tanner represents multinational companies with equity compensation, executive compensation, employment, and data...  |  Read More

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