Many countries finalized new regulations and released new guidance in 2024 regarding global equity plans. Multinational companies should confirm whether their equity grant materials and plan administration align with such updates, especially if equity grants are expected during Q1 2025. Given the frequent overlap between global equity compensation and global employment laws, it is also recommended that in-house counsel teams collaborate to ensure equity grant materials comprehensively address any employment-related matters. This summary highlights selected updates that many companies are currently addressing.

In Depth

BRAZIL

A court decision reaffirmed that stock options are not considered labor remuneration and instead are considered “commercial income” (Brazilian Superior Court (STJ), Case No. 1226). As such, stock options are not subject to income tax at grant or exercise. However, upon the sale of any shares, the value is subject to capital gains taxation. The decision is pending a formal appeal but, if upheld, helps to solidify the position that no tax is due at exercise.

Next Steps for Companies: Continue to monitor ongoing updates. The court decision highlights the tension between Brazilian tax authorities and labor courts regarding tax treatment of stock option and restricted stock unit (RSU) grants. Assuming the decision is upheld, companies may elect to increase utilization of stock option grants to Brazil employees.

CANADA

• Quebec – A court of appeals in Quebec...

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