Mobility Matters

Rewarding employees goes beyond just compensation for their performance. It serves as an incentive to boost motivation, commitment, and engagement. Remuneration should be viewed as a strategic tool to attract and retain talented employees, positioning organizations as top employers in a rapidly changing labor market. Equity-based remuneration is particularly effective in achieving these objectives.

In the Netherlands, there has been a rise in complex equity-based remuneration structures in recent years, partly due to the introduction of lucrative interest legislation about a decade ago. However, starting from 2024, the increase in tax rates in the Dutch substantial interest regime may lead to a shift in this trend. Anticipating developments in the labor market is crucial for businesses and organizations to remain competitive, especially as employee expectations evolve and the competition for talent intensifies. With the changing statutory landscape in the Netherlands, it is essential to seize the opportunities to elevate the organization's compensation structure, talent strategy, and competitive edge.

Looking at the historical context, equity-based compensation has long been established in the dynamic business environments of the US and the UK. However, it took until the post-World War II era for nonfinancial employee participation to emerge in the Dutch workplace, albeit tentatively. Equity-based incentives were initially limited to top management in publicly traded companies. Over time, financial employee participation expanded to a broader range of companies and employee populations, driven by globalization and intensified labor market competition. As the legal landscape evolved, new possibilities for diverse forms of equity-based compensation emerged, paving the way for new initiatives.

In 2024, we are witnessing more opportunities for equity-based incentives and their integration into compensation structures across various business sectors. Changes in domestic tax legislation may make it easier to choose an equity incentive plan to motivate employees. Complex employee equity structures may become less tax-advantageous, making it more appealing to provide easily accessible stock appreciation right (SAR) plans to employees.

To learn more about the evolving landscape of equity-based compensation and how it can benefit your organization, we invite you to download the full article. Gain valuable insights into the strategic use of equity incentives, the potential impact of tax changes, and the steps to develop a tailored plan that aligns with your company's objectives. Don't miss out on this opportunity to stay ahead in the competitive labor market.