Global Tax Advantaged Plans

Mike Pewton, Executive Director, Solium Suzannah Crookes, Legal Director, Pinsent Masons

Dennis Weinhold, Head of Equity Programs, Novartis Angela Blair, Manager, Governance & Shareholder Services, Johnson Controls

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Our speakers

Mike Pewton Solium – Executive Director mike.pewton@solium.com

Angela Blair

Johnson Controls, Inc. Manager, Governance & Shareholder

Services Angela.Blair@jci.com

Suzannah Crookes Pinsent Masons – Executive Director

Suzannah.Crookes@pinsentmasons.com

Dennis Wienhold Novartis - Head of Equity Programs

dennis.weinhold@novartis.com

Speakers on the Spot

Question to •  Angela Blair Johnson Controls

•  Dennis Weinhold

Audience on the spot •  How many use tax advantaged plans? •  What are the reasons

•  For doing so? •  For not doing so?

Audience on the spot •  How many of the following countries have tax

advantages that could be used for share plans

Morocco

Puerto Rico

UK

USA

Ireland

Spain

Denmark

Norway

Australia

China

France

Germany

Hungary

South Africa

Sri Lanka

Belgium Switzerland

Let’s take a look at one or two in particular

UK Switzerland

USA France

Swiss tax discounts on equity awards

| Presentation Title | Presenter Name | Date | Subject | Business Use Only 8

Restricted Stocks

| Presentation Title | Presenter Name | Date | Subject | Business Use Only 9

Restricted Stock Units

In case of an additional blocking/deferal election the same market value reduction will apply at vesting/taxation date

Swiss tax discounts on equity awards

UK “approved” plans • Bring into capital gains rather than income tax regime (top rate 28% rather than 45% plus NICs)

• Executive Plans o  Company Share Option Plan “CSOP”

o  Enterprise Management Incentives “EMI”

• All-employee Plans o  Sharesave/SAYE - option plan with savings element

o  Share Incentive Plan/SIP - share purchase plan with matching/free shares and dividend reinvestment

• Executive plans o  conditions and limits

o  tax saving v complexity

o  is there sufficient value in it?

• All-employee plans o  little flexibility on plan design

o  balance consistency with global plan against UK tax advantages

o  workforce expectations?

UK “approved” plans

US approved plans

• Really?

French approved plans

• Really?

Is there hope for cash plans?

•  Tax planning

• Social security contributions

• Reinvestment of awards?

• Are complexities the motive behind cash awards (and non use of tax advantages)

• Other

Using Tax advantaged plans?

Complex Expected Insufficient benefit Go the extra mile Lack of understanding Increase take up Difficult to manage Increase tax efficiency

•  Not if you understand them •  Not if you work through them •  US, France & UK are the most complex and the

most diffuse

•  Would anyone like us to go through the French approved Plan?

Complex

Thought so

•  Spain €12,000 (or 40%) •  Canada 50% •  Israel (no tax until Sale) •  US, France & UK

Insufficient benefit

•  Local companies understand •  Employees understand •  Do advisors understand?

Lack of understanding

•  Many need no specific changes to Plan rules •  Local company is often aware of this •  Employees are often aware of this •  Manage through your tax guides

Difficult to manage

•  UK, US, France, Ireland •  Employees will be disappointed •  Manage expectations and obligations through your tax

guides

Expected

•  Shows company commitment globally •  Shows local buy in

Go the extra mile

•  Plan will be more popular •  Look at take up in traditional tax approved countries

Increase take up

•  Through plans •  No social security for local company •  Also think of timings (tax years ends) •  And exemptions for CGT, transfers etc. •  Look at take up in traditional tax approved countries

Increase tax efficiency

Audience on the spot •  How many are thinking of exploring the use of tax

approved plans?

Thank You Mike Pewton

Solium – Executive Director mike.pewton@solium.com

Angela Blair

Johnson Controls, Inc. Manager, Governance & Shareholder

Services Angela.Blair@jci.com

Suzannah Crookes Pinsent Masons – Executive Director

Suzannah.Crookes@pinsentmasons.com

Dennis Wienhold Novartis - Head of Equity Programs

dennis.weinhold@novartis.com

Thank You Thank you for attending GEO’s 17th Annual International Conference in Scottsdale. We hope you enjoyed this session. •  If you require CPE Credit, don’t forget to Sign Out

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