The NASPP Blog

The tracking and taxation of mobile employees continues to be one of the most complex challenges in stock administration. Equity awards are being issued on a broader basis, which means more participants to monitor. Increased focus and scrutiny from tax authorities across the globe translates to a greater need to be vigilant with tax calculations and collections. One question we tend to hear over and over again: How are other companies handling this? In today’s blog, I’m able to provide some answers.

Thanks to data collected in a recent Morgan Stanley/NASPP Mobility Survey, we’ve got some insights into current mobility practices. First, the survey demographics:

• 289 respondents
• All respondents verified that they represent an issuer firm and are involved in stock plan administration
• Data was collected between July 15-25, 2014

Now, let’s dive into the details. Among the highlights:

• Nearly three-quarters of respondents said they rely on a third party to assist with taxation of their mobile employees
• 42% of firms surveyed provide education to affected “mobile” employees
• 3 out of 10 companies believe their mobile workers are confused about how their movements can affect their global and domestic tax obligations
• Nearly 40% of respondents reported a budget of $25,000 or less allocated to mobility efforts
• Less than 4 out of 10 companies rate their mobility efforts as excellent or above average
• Business travelers receive relatively low monitoring – only 14% of global and 15% of firms reported tracking business travelers

Practices around mobility continue to evolve. The results from this survey seem to suggest that there is room for improvement in some areas – including employee education, scope of tracking and overall administration. In my opinion, the category of business travelers continues to be an under-tracked component of mobile populations. Companies may be wise to increase their efforts in the business traveler category before tax authorities increase their compliance enforcement in this area. Additionally, it seems that the majority of companies are aware that mobile employees may be under educated about the taxation of their equity awards. This seems to be a prime area for a portion of the communication budget.

For more information, access the article “Workforce on the Move“, which includes analysis of survey results.

-Jennifer