Global report: Back to the basics?
 

Global report: Back to the basics?

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How does your company's employee equity plan compare to the rest? Our Global Equity Incentives Survey shows how 351 multinationals are using plans to boost their people's performance in more than 75 ...

How does your company's employee equity plan compare to the rest? Our Global Equity Incentives Survey shows how 351 multinationals are using plans to boost their people's performance in more than 75 countries. Companies are still aiming to match compensation to business strategy and keep up with market trends. But the types of awards and plans vary across markets.

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    Global report: Back to the basics? Global report: Back to the basics? Document Transcript

    • 2012 Global Equity Incentives Survey Global report: Back to the basics? Executive summary A joint effort between PwC and NASPP September 2012
    • Table of contents Foreword 1 Equity grant practices 2 Tax compliance and planning 7 Process and administration 15 Communications 16 Concluding remarks 19 PwC human resource services 20 NASPP 21 PwC contacts 22 2012 Global Equity Incentives Survey
    • Foreword The past few years have been interesting times for those who offer global employee stock plans. In 2011, we saw an overall decrease in equity awards granted, with a rise in the use of performance awards. This appeared to be mainly due to the impact of the Dodd-Frank Act and increasing pressure to align pay with performance. 2012 seems to be the year of cautiousness, with companies getting “back to the basics.” As the economy continues to struggle to recover, and corporate budgets are tight, multinational companies are faced with a new model for global competition in the marketplace. Technology continues to advance and people are less tied to working in a specific location. Therefore, the sky is the limit for global competition. Multinational companies are forced to re-consider what market compensation is for their employees and how to define the market. This seems to dictate which countries are recipients of equity compensation and at what levels. The struggling global economy, coupled with the political elections around the corner in the US and abroad, seems to be driving the “back to the basics” approach with respect to their employee equity plans. In a reversal of 2011, grant levels are back up for 2012 and performance awards seem to be on the decline as companies increased their use of timebased options and restricted share awards. For 2012, the key drivers for offering employee equity programs remain the same as in prior years: aligning compensation with business strategy and keeping pace with market trends. As these drivers play out differently in diverse economies, it is not surprising to have changes in the types of awards and plans offered, even though the underlying drivers are the same and have been for many years. For this year’s survey, PricewaterhouseCoopers (PwC) and the National Association of Stock Plan Professionals (NASPP) teamed together to compile one of the most extensive surveys in industry history. We are pleased to share the 2012 Global Equity Incentives Survey (GEIS): “Back to the Basics” Executive Summary with you. This Executive Summary provides key insights from the GEIS, the eighth in the survey series. Our survey is one of the most comprehensive studies available on the design and administration of equity incentives compensation plans for multinational companies. This year, we had the highest number of survey participants, coming in at 351 multinational companies headquartered in 30 countries with employees in more than 75 countries. The 2012 survey includes new topics reflecting more questions regarding performance award types and metrics, mobile employees and specific questions for employee stock purchase programs. We hope you find the results from the 2012 survey useful as you evaluate and compare your employee equity plans to those of your peers and design plans that are effective drivers of the behaviours necessary for your company’s success in this global economy. 2012 Global Equity Incentives Survey  / 1
    • Equity grant practices This year, we observed an overall increase in the percentage of the employee population receiving grants, as opposed to last year’s finding of decreased equity grants on a global basis. Our 2012 survey data indicates a return to the global equity grant levels observed in our 2009 survey. The majority of companies reported having the same number of employees in each country in the 2009, 2011 and 2012 surveys; so, while companies reduced the prevalence of their global equity grants last year, they did not generally decrease their headcounts. It is a promising sign that grants have returned to previous levels and employee counts remain stable. Below is a representative sampling of this data on a country level. Country Top 10 2012 2011 2009 US (1st in 2012) 2012, 2011, 2009 90% 73% 89% UK (2 in 2012) 2012, 2011, 2009 88% 71% 91% Canada (3 in 2012) 2012, 2009 87% 68% 88% Germany (4 in 2012) 2012, 2011 86% 70% 86% Belgium (5th in 2012) 2012, 2011 85% 71% 85% Singapore (6 in 2012) 2012, 2009 85% 68% 88% Australia (7 in 2012) 2012, 2009 85% 66% 91% nd rd th th th France (8 in 2012) 2012, 2009 84% 70% 88% Netherlands (9th in 2012) 2012, 2009 84% 69% 87% Switzerland (10th in 2012) 2012, 2011, 2009 84% 74% 92% Sweden 2011 84% 70% 86% Ireland 2011 83% 73% 84% Italy 2009 80% 69% 89% Norway 2011 80% 69% 79% South Africa 2011 73% 70% 77% th With respect to the types of equity grants companies are making, the trend seems to be to continue with stock options and restricted stock/restricted stock units. The majority of companies (73% of participants) responded that they are not planning on making any changes to their equity plans. This is not surprising in light of 94% of participants indicating that they think their employees are satisfied with their equity plans (up from 81% in 2011). While last year’s GEIS reported the rise of performance awards, this year’s GEIS shows that grants of awards with performance-based vesting have steadily declined from 2009 through 2012. Maybe the “newness” of Dodd-Frank’s reporting requirements and the lack of teeth in non-binding shareholder votes have provided companies with the comfort to rethink their performance awards; or perhaps companies have started to limit these types of grants to very senior employees, knowing that complex performance goals may not translate well to a broader workforce. 2  /  PwC & NASPP
    • Employee level of satisfaction outside the US with stock plan benefits 100% 80% 60% 40% 20% 0% Satisfied 2012 2011 Dissatisfied 2007 For companies with performance equity programs, our findings indicate that since 2009, there has been a rise in companies with true performance based /market based plans measuring targets on a “hit or miss” basis, versus recipients hitting targets during the performance period and receiving incremental payments throughout the period. About 80% of companies offering performance/market plans measure achievement at the end of the performance period, with only 9% measuring at two or more intervals during the period. Our findings indicate that performance mostly impacts the number of shares vested/released, rather than number of shares granted. Therefore, while companies are making similar sized grants as in the past, they are taking a more strict approach to ensuring that employees meet their targets. As many countries, particularly in the EU, have corporate governance legislation similar to Dodd-Frank or are starting to implement similar rules (such as CRD3 in the EU), it is not surprising to note that nearly 100% of companies surveyed state that performance metrics do not differ for US and non-US participants. Additionally, our data indicates that grant practices generally do not vary between local hires and international assignees. Types of vesting conditions utilized: global averages for grants made from 2009 through 2012 120% 100% 80% 60% 40% 20% 0% Service based vesting 2012 2011 Performance based vesting Market based vesting 2009 2012 Global Equity Incentives Survey  / 3
    • Our survey results revealed that the predominant drivers of equity compensation practices remain virtually the same as in recent years. The number one driver continues to be alignment of total compensation strategy with the company’s business, while number two remains following market trends. Not surprisingly, we found a notable number of companies moving from using performance metrics that were predominantly internal to the company to starting to include external metrics which factor in market performance. With the economy recovering slowly, companies want to measure their successes against their competitors in the market place to ensure the company’s business is on pace to recover and aligning equity compensation with this indicator of market success. Most significant driver of equity compensation practises 60% 50% 40% 30% 20% 10% 0% Align comp with Market trends Tax issues business strategy 2012 2011 Change made other Corp governance issues Option out of money Issues raised Accounting by ISS issues Issues raised Int'l by board coordination 2009 Long and short term changes anticipated in employee compensation practises 2009 2011 2012 12 months 5 years 12 months 5 years 12 months 5 years 0% Employee compensation will likely increase 4  /  PwC & NASPP 20% 40% Employee compensation will not likely change 60% Employee compensation will likely decrease 80% 100% Any change will depend on performance or meeting market target
    • As indicated above, this year, companies reported that they are less optimistic about increasing employee compensation in general in both the short and long term; however, there was a modest increase this year in the number of companies that indicated that any increase would depend on performance, or on meeting market targets. While there was also a decrease in expectation for increasing CEO pay this year in both the short and long term and a rise in companies reporting a move toward meeting performance market metrics in terms of raising CEO pay, the respective decrease/increase were less significant than reported this year for employee compensation. As everyone knows, CEO pay has been heavily scrutinized for several years due to increasing disclosure requirements and pressures to better align executive pay with the company’s performance. It seems that this expectation to match pay with performance is permeating down through organizations to non-executive level employees. Highest increase in equity grants by country Argentina Australia Brazil Canada China Finland Hong Kong India Japan Singapore 0% 5% 10% 15% 20% 25% 30% 35% 40% % Change from 2011 to 2012 2012 Global Equity Incentives Survey  / 5
    • The table on the previous page shows the countries with the highest increase in grants from 2011 to 2012. The majority of companies surveyed reported that they are not planning to change the number of foreign affiliates that participate in their equity based compensation programs (only 20% plan on increase, while 6% plan on decrease); however, as previously noted, they have increased the number of employees they are granting to in these countries. A mix of factors may explain the country-specific increase in equity award grants noted above, among which are increased populations (although our survey reports that, generally, employee counts have remained the same) and, maybe more significantly, the need to attract and retain key talent, in emerging markets/ economies (e.g. Argentina, Brazil, China, India). Or possibly companies are feeling more comfortable that they now understand the recent changes in the regulatory landscape impacting equity (e.g. tax legislation in Australia and Canada, China SAFE legislation). As displayed in the equity compensation driver table on the prior page, there has been a notable increase in the prevalence of tax issues driving equity compensation practices this year. This is not surprising, considering the global increase in both new tax legislation and payroll audit activity related to equity compensation over the past several years and also the complexities of mobile employee taxation. Local governments are becoming increasingly aware of these plans and how they work, and want to ensure that they are collecting what they deem to be the appropriate taxes on these awards and/or are aware of what is being granted and to whom. Finally, with respect to ESPP grant practices, there has been a steady decline in global participation from 2007 through 2012. In particular, the majority of companies that previously reported employee participation rates of 26%–50% now have 0%–25% of eligible employees participating in their ESPPs. Of those companies that have historically offered an ESPP, in the past year a large majority (82%) continued to offer the plan. However, 9% of companies chose to eliminate it in the past year, while 38% eliminated their ESPP in the past 2–3 years. As we enhanced our survey around ESPP data this year, it will be interesting to compare some of these statistics in the coming year to see what direction companies decide to take with their ESPPs. 6  /  PwC & NASPP
    • Tax compliance and planning While achieving both local employee and company tax efficiency/savings remains the highest priority among participants (45%), this is a fairly significant drop from even in the midst of the “Great Recession,” where more than half (54% and 58% in 2011 and 2009 respectively) of participants were focused on both employee and company tax efficiency. In fact, a parallel increase in the number of companies that do not consider any tax efficiencies is up to 33% from approximately 22% in 2011 and 2009. Perhaps indicating that equity is considered to be a key component of compensation, companies are concerned less with tax savings that can be achieved through such techniques as chargeback arrangements and more on successful employee participation in a recovering market. Or perhaps companies are deciding against the extra cost of administering tax favoured programs outside the US, especially since a lot of countries have significantly reduced savings available under these programs in recent years to increase tax revenues. Tax compliance Another interesting downward trend is the frequency of annual company compliance reviews, where before, half of participants (57% in 2011 and even higher in years past) conducted annual reviews, whereas this year only 34% responded that they have conducted an annual review. A little less than half of participants (45%) now conduct only sporadic reviews, as they learn of new updates. It is possible that this downward trend is related to budget-conscious companies not wanting to allocate resources to full-scale compliance reviews or an increased level of understanding internally with respect to the impact of tax and regulatory changes. Frequency of internal compliance reviews 70% 60% 50% 40% 30% 20% 10% 0% Sporadically, upon hearing of updates in a relevant country* 2012 2011 Annually Upon implementation of the plans Every 2 years Every 6 months or more frequently Other 2009 *New choice in 2012, not an option in previous years' surveys 2012 Global Equity Incentives Survey  / 7
    • It should be noted that even though companies do not seem to be conducting full compliance reviews as frequently, companies remain aware of the complexities of compliance, with 78% of participants responding that compliance is the most challenging issue associated with global equity plans. Instead of conducting full compliance reviews, companies are looking for support from outside service providers (77% of companies use an external service provider to inform them of global tax or regulatory changes and of those, 58% also review websites/news bulletins). Staying informed on global tax/regulatory changes 9% 46% 77% We have engaged an external service provider to provide us with this information We review relevant websites/news bulletins where this information is posted We rely on our local country contacts to provide us with this information 47% We attend seminars where country updates are discussed 58% 8  /  PwC & NASPP We do not have a standard procedure for obtaining this type of information
    • This compliance review trend also could be a sign that participants continue to grow more knowledgeable about and comfortable with the various global requirements as well as confident in their own global network, where the local requirements are communicated, understood, coordinated and thereby accomplished locally. In fact, nearly 100% of participants believe that they have achieved some level of, if not full, global compliance (in 2012, 63% of participants believe that they are fully compliant globally and another 36% believe that they are somewhat compliant). However, achieving global compliance is not without its hurdles. Audit activity remains a challenge, for example, in the UK 31% of companies were recently audited and 17% of the companies in France have been audited. While Germany still ranks high in audit activity at 14%, we did see a significant and welcome drop from 36% in 2011. Countries audited in last three years 40% 35% 30% 25% 20% 15% 10% 5% 0% France 2012 Germany 2011 Hong Kong Japan Singapore UK US 2009 In addition, the most challenging international tax compliance countries remain China, France, UK, India and Australia—in that order. These very same countries have tested the most seasoned equity compensation professionals for years, where in 2011 and 2009 the same countries appeared on our list. Countries with most challenging tax compliance 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Australia 2012 Belgium 2011 Brazil Canada China France Germany India UK US 2009 2012 Global Equity Incentives Survey  / 9
    • Specifically, with China, India and Australia in mind, as participants focus on navigating through the diverse and disparate global tax landscape, not surprisingly there has been a chilling effect where tax efficiency, compliance and ease of administration diverge. For example, as a result of China tax (Circular 35) and foreign exchange (SAFE) registrations, more than 50% of participants (55% in 2012 and 53% in 2011) do not grant equity to Chinese nationals. Of those participants that offer equity in China, 31% have registered all their equity plans with the local in-charge tax authorities under Circular 35 and approximately 65% have, or are in the process of, obtaining SAFE approval from the Chinese foreign exchange administration. With respect to India, while there is a requirement to engage a Category I Merchant Banker valuation to determine the equity award taxable benefit, only 52% of companies offering equity awards in India comply with this requirement; the remainder continues to use the quoted fair market value. It should be noted that in 2011 no participant that did not use a Category I Merchant Banker was contacted by the Indian tax authorities for non-compliance; however, in 2012, 2% of participants were contacted, showing that the Indian tax authorities may be starting to look at the level of compliance with this requirement. Lastly, in light of the change in the timing of taxation of options in Australia (generally, from exercise to vesting), there is a continuing decline in stock option grants, where 71% of participants no longer grant options in Australia; conversely, there is a 27% increase in granting only restricted share type awards. The other challenge participants with operations in Australia face relate to securities issues (ASIC). As a result, 31% of participants actively limit equity award grant sizes to ensure reliance on ASIC disclosure exemptions and 46% rely on the “small scale” and/or “senior manager” exemptions. Tax-favoured planning Tax-favoured equity awards continue to be most commonly offered by participants to employees in France and the UK. Both French and UK tax-favoured awards enjoy not only tax deferral until sale, but also a fairly significant employer social tax savings (although France may not prove to provide any significant employer social tax savings due to recent changes in French tax legislation), as both France and the UK would otherwise impose steep uncapped social taxes. However, as is revealed below, these tax savings are not always fully realized, especially in the case of the UK. In France, the most common tax-favoured awards granted by the majority of participants are either qualified stock options or restricted share unit awards. More specifically, 61% of participants offer qualified stock option awards and 89% offer qualified restricted share unit awards (conversely, only 12% of participants, and declining each year, offer regulated saving plans). To ease qualified award administration, ensuring qualified holding periods are met and, thus, tax savings enjoyed, most participants have changed the vesting schedule (65% for qualified options, 67% for qualified restricted share units) or, in the case of qualified options, impose a transfer restriction (70%). For those participants that forgo tax-favoured awards in France, approximately half do so as a result of low headcount and approximately one-fifth due to burdensome administration. 10  /  PwC & NASPP
    • As for the UK, the most common tax-favoured HMRC approved award is the Company Share Option Plan (CSOP), with 57% of participants having implemented one; the next most common tax-favoured HMRC approved plan is the Share Incentive Plan (SIP), with 54% reporting implementation. Generally, if a CSOP is offered, the vesting schedule is the same as for awards under the parent company plan (87%). For participants that operate approved CSOPs, 78% also grant unapproved options to deliver value in excess of the approved plan limit as well. However, nearly half (48%) of participants do not realize the related tax savings associated with these tax-favoured awards, reporting that less than a quarter of CSOP options are exercised in a tax qualified manner, and in fact, only onefifth report that a majority of the approved options (76% to 100%) are exercised in a tax qualified manner. For those participants that want to ensure company tax savings, 36% shift the company’s national insurance contribution (NIC) liability to employees, of which 98% do so without granting additional awards. Prevalence of locally tax-favoured stock option plans by country 70% 60% 50% 40% 30% 20% 10% 0% Australia Belgium Canada Denmark France Ireland Italy Spain UK US 2012 2012 Global Equity Incentives Survey  / 11
    • Cost chargeback As the economy continues to struggle, 59% of participants responded that they chargeback the costs of the equity awards, at least in some countries. Of those participants that recharge the foreign affiliate for equity grants, 49% recharge the spread/value at the time of settlement and 46% of companies recharge the grant date fair value (although we assume they limit this amount to the amount that can be remitted tax-free to the parent company). Prevalence of chargeback arrangements to obtain corporate tax deductions 16% Not at all 41% 19% In selected locations In a majority of locations All locations 24% For companies that chargeback, the reasons include to achieve cash savings (39%), mitigate accounting expense (18%) or to accomplish both (36%). Reasons to start charging back equity plan costs 7% To secure local tax deductions 39% 36% Other 18% 12  /  PwC & NASPP To mitigate costs associated with expensing Both of the above
    • The highest prevalence of chargebacks are in Europe (more than 30% of the respondents indicated that they charge back in France, Germany, Switzerland and the UK) followed by Mexico (30%) and Malaysia (30%). This is despite the fact that a chargeback triggers adverse consequences in Mexico, for example, and that corporate tax deductions can be limited in France and Germany. In addition, there is a statutory deduction that is generally available in the UK without the need for chargeback. Percentage of companies with chargeback arrangements by country Argentina Australia Austria Belgium Brazil Canada China Denmark Finland France Germany Hong Kong India Ireland Italy Japan Kazakhstan Kuwait Malaysia Mexico Netherlands Norway Philippines Russia Saudi Arabia Singapore South Africa South Korea Spain Sweden Switzerland Taiwan Thailand United Arab Emirates UK Uzbekistan Venezuela 0% 5% 10% 15% 20% 25% 30% 35% The most common reasons for not charging back equity award costs (41% of participants confirmed that they do not recharge costs to the local affiliate) are low headcount in the countries where costs are not charged back (45% of participants), that charging back provides only limited tax advantages based on the participant’s current global structure (32%) and administrative burden (32%). 2012 Global Equity Incentives Survey  / 13
    • Reasons for not charging back equity plan costs Not enough stock plan participants Administrative burden Provides only limited tax advantages based on our current global structure Currently evaluating doing this Regulatory requirements (e.g., foreign exchange controls, treasury share requirements, etc.) No knowledge of chargeback agreements Results in unfavorable tax treatment to employer and/or employee Other 0% 14  /  PwC & NASPP 10% 20% 30% 40% 50%
    • Process and administration With an ever-changing and complex global tax and regulatory climate and stepped-up efforts among most companies to address global mobility challenges, the demands on global stock plan processes and administration have reached new heights over the past year. The most challenging aspects of offering a global stock plan continue to be reported as compliance (78% in 2012) and administration (64% in 2012). With respect to global mobility compliance, 80% of companies responded that they now track movement for their international assignees who are part of a formal assignee program, and for globally mobile employees who are not part of a formal assignee program 60% of companies responded that they track movement. Not surprisingly, the most challenging countries in terms of compliance were reported as China, France, the UK and the US. Given these unique compliance challenges, companies over the past year have relied heavily on outsourcing some of these functions. A lot of companies have looked to their broker (whether full-service or discount) to take on more of the administration work relating to these plans. In fact, we have seen an increase in the use of brokers as primary equity plan services providers. Consistent with this trend, it is not surprising to see that most companies outsource more than 75% of their plan administration for non-US based employees, with an astounding 88% of companies relying on their plan administrator’s website for non-US employee recordkeeping. We would expect this trend to continue as internal budgets are tight and the cost to administer these plans can be leveraged against the brokerage fees brokers earn from participants trading in the shares issued under these plans. Storing equity/stock compensation data 70% 60% 50% 40% 30% 20% 10% 0% With an external plan administrator 2012 2011 In-house using In-house using commercially available spreadsheet software equity/stock plan software In-house using database application programmed in-house In-house using Enterprise Resource Planning (ERP) software (Oracle, PeopleSoft, SAP) Other 2009 2012 Global Equity Incentives Survey  / 15
    • Communications Communications are a very important part of obtaining value from employee equity plans. We were not surprised by our findings regarding how quickly grants are communicated to employees (although the one company that responded that it does not communicate equity plans was surprising). A vast majority of companies (74%) communicate grants to employees at each grant date, 37% communicate at vesting and 35% communicate annually with total rewards packages. Grant agreements are typically distributed to nonUS employees within two weeks (35%) or within one month of grant date (34%). And 23% of companies distribute agreements within one week of grant. Communication of equity plans 80% 70% 60% 50% 40% 30% 20% 10% 2012 r he Ot A gr t ev an er td y ay At ve st in g A re nnu wa a rd lly: s w pa ith ck to ag ta At e l gr th an e t i tim s e m th ad e W e fir he st n bo ar d ap pr As ov re t es in qu ax o ire r a co m re un en gu try ts lat ch or an y ge Pe be rio tw di In ee ca re a n lly e qu cco gr sh xch irem rda an ar an e nc ts es ge nt e ar (s) s o wi e w f th W list he the th ar he ed re t sto e he ck (e e m n e .g o m ., d p re ifie loy pr d e ici e aw ng ) ar ds 0% Continuing the trend from last year, in 2012, companies are leaning more heavily on technology to disseminate plan information. Also in 2012, 55% of participants delivered their award agreements via the administrator’s Internet site, up from 39% in 2011 and 25% in 2009, and 76% of companies use electronic acceptance of award agreements on websites hosted by the company, a large increase from 39% in 2009. 16  /  PwC & NASPP
    • Delivery of award agreements 60% 50% 40% 30% 20% 10% 0% Posted on the administrator’s Internet site 2012 2011 Sent by email to employee’s company email address Mailed to employees’ work address Posted on the Company’s intranet site Mailed to employee’s home address No award agreements are distributed Other 2009 Most of the communications (61% of companies) are not translated into local languages. In fact, there has been a decrease in translating plan documents into a country’s local language over the past few years (2012: 61%, 2011: 52%. 2009: 49%). Only 38% of companies translate documents to local languages (and generally only in the countries where required by local law). Translation of plan documents 70% 60% 50% 40% 30% 20% 10% 0% Translate plan documents into the local language(s) 2012 2011 Translate only plan documents required by law Translate more documents than required by law, but not all Translate all plan documents, required and not required by law 2009 Companies do, however, make accommodations for country-specific language in their award agreement, with 62% of companies customizing award agreements for non-US employees. For those companies that have customized agreements for non-US employees, most have one general non-US agreement, with a few country-specific agreements (35% out of all respondents, 56% of those that do have customized agreements). 2012 Global Equity Incentives Survey  / 17
    • Customization of grant agreements 9% Use the same agreement that is used for US employees 18% 38% Use one agreement for most non-US employees but also use a few country-specific agreements Use the same agreement for all non-US employees Use different agreement for each country 35% Often seen in a non-US agreement is a data privacy consent; in countries with data privacy laws, many companies (35%) collect consent to transfer personal information to the United States as a part of the award agreement, 23% collect consent as a part of the employment agreement and 22% collect consent in both the award and the employment agreement or in a separate agreement. Collection of consent to transfer information 7% 23% As part of hiring agreement As part of grant agreement 22% In a separate agreement Some combination of these methods Do not comply with requirements to collect consent 9% 35% 18  /  PwC & NASPP
    • Concluding remarks Results from the 2012 GEIS clearly indicate that the same drivers remain, although it is interesting to see how the same drivers play out in different environments. The nuances of the changes from 2011 to 2012 certainly indicate that companies are growing increasingly comfortable doing business on a global basis and taking on risk with doing business globally. Although regulatory compliance is still the biggest concern with offering these plans globally, there is a sizable decrease in compliance review efforts and more reliance on outside advisors to alert companies to changes in the regulatory and tax environment. Companies have generally restored grant levels to 2009 levels, and seem to be coming out of the recession with a newfound comfort in making business decisions on where to allocate internal resources relating to employee equity plans and determining what types of plans work for them. We look forward to seeing where 2013 takes us! 2012 Global Equity Incentives Survey  / 19
    • PricewaterhouseCoopers (PwC) PwC firms help organizations and individuals create the value they’re looking for. We’re a network of firms in 158 countries with close to 169,000 people who are committed to delivering quality in assurance, tax and advisory services. Additionally, in the US, PwC concentrates on 16 key industries and provides targeted services that include—but are not limited to—human resources, deals, forensics, and consulting services. We help resolve complex issues and identify opportunities. PwC human resource services As a leading provider of HR consulting services, PwC’s Human Resource Services’ global network of 6,000 HR practitioners in over 150 countries, brings together a broad range of professionals working in the human resource arena—retirement, health & welfare, total compensation, HR strategy and operations, regulatory compliance, workforce planning, talent management, and global mobility—affording our clients a tremendous breadth and depth of expertise, both locally and globally to effectively address the issues they face. PwC is differentiated from its competitors by its ability to combine top-tier HR consulting expertise with the tax, accounting and financial analytics expertise that have become critical aspects of HR programs. PwC’s Human Resource Services (HRS) practice assists clients in improving the performance of all aspects of their HR organizations, both management of Human Capital (HC) and HR operational excellence, through technical excellence, thought leadership and innovation. Please visit our website at: www.pwc.com/us/hrs 20  /  PwC & NASPP
    • NASPP The National Association of Stock Plan Professionals The NASPP is the leading membership association for stock plan professionals and the only organization that brings together the full spectrum of roles involved in stock compensation. We have nearly 6,000 members whose responsibilities relate, directly or indirectly, to stock plan design and administration, including compensation and human resources professionals, stock plan administrators, securities and tax attorneys, accountants, compensation consultants, corporate secretaries, brokers and transfer agents, and third-party administrators and software vendors. Here are just a few of the benefits of NASPP membership: Up-to-the-minute news and guidance: The NASPP is the source for the latest stock plan developments. Our free webcasts, alerts, and bi-monthly newsletter keep our members current and we publish the industry’s most comprehensive survey on stock plan design and practices. Unbeatable networking and peer-to-peer guidance: The NASPP provides unparalleled networking opportunities through our 30 local chapters, popular Q&A discussion forum, and national member directory. Industry-leading conference: The NASPP hosts the industry’s premier conference on stock compensation; with close to 2,000 attendees, this is a don’t-miss event. The answers to your questions: The NASPP provides the resources to research any stock plan-related question; our online portals and surveys are a one-stop-shop for resources addressing the issues our members are grappling with today. Practical advice from the experts: We report what the experts are saying and we insist on practical content that our members can really use. Practice pointers, action items, and insider tips are part of everything we do. Please visit our website at: www.naspp.com 2012 Global Equity Incentives Survey  / 21
    • PwC contacts AmyLynn Flood + 1 267 330 6274 amy.lynn.flood@us.pwc.com Andrea Stetz + 1 646 471 2345 andrea.stetz@us.pwc.com Parmjit Sandhu + 1 646 471 0819 parmjit.k.sandhu@us.pwc.com PwC has an extensive global network of Human Resource Services practitioners. For further information contact: Reward by geography Global network leader, Reward Marc Hommel +44 (0) 20 7804 6936 marc.hommel@uk.pwc.com North America—US William Dunn + 1 267 330 6105 william.j.dunn@us.pwc.com North America—Canada Jerry Alberton + 1 416 365 2746 jerry.alberton@ca.pwc.com South and Central America Joao Lins + 55 11 3674 3536 joao.lins@br.pwc.com United Kingdom Tom Gosling + 44 20 7212 3973 tom.gosling@uk.pwc.com Switzerland Robert Kuipers +41 (0)58 792 4530 robert.kuipers@ch.pwc.com 22  /  PwC & NASPP Germany Konrad Deiters +49 89 5790 5931 konrad.deiters@de.pwc.com Netherlands Janet Visbeen +31 8879 26429 janet.visbeen@nl.pwc.com Middle East Stuart Carter +974 4419 2834 stuart.carter@qa.pwc.com India Padmaja Alaganandan +91 80 4079 4001 padmaja.alaganandan@in.pwc.com South Africa Gerald Seegers +27 (11) 797 4560 gerald.seegers@za.pwc.com Australia Della Conroy +61 (3) 8603 2999 della.conroy@au.pwc.com China/Hong Kong Lukia Xing +86 (10) 6533 7018 lukia.xing@cn.pwc.com Additional contacts HRS Global Leader Michael Rendell + 44 20 7212 4945 michael.g.rendell@uk.pwc.com HRS US Leader Scott Olsen + 1 646 471 0651 scott.n.olsen@us.pwc.com
    • © 2012 PricewaterhouseCoopers LLP. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers (a Delaware limited liability partnership), which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.  BS-13-0075-A.0912.DvL