News & Analysis as of

Germany Employee Stock Ownership Plans

Latham & Watkins LLP

German Federal Labour Court Rules on Virtual Share Options and Exit Bonuses

Latham & Watkins LLP on

The German Federal Labour Court has tightened its case law. According to a decision from 19 March 2025 (10 AZR 67/24), the reasons for which were only recently published, employees may be entitled to an exit bonus even if the...more

Orrick, Herrington & Sutcliffe LLP

#ESOP: How to Deal with the New Case Law on the Forfeiture of Vested Virtual Shares – A Practical Update for Employers and...

Incentive programs like an employee stock option plan or a virtual stock option plan ("VSOP") are widely used by young technology companies ("Company") to reward and retain talent ("Beneficiaries"). A key feature in these...more

Ogletree, Deakins, Nash, Smoak & Stewart,...

German Federal Labor Court Finds Certain Virtual Stock Option Forfeiture Clauses May Unreasonably Disadvantage Employees

On March 19, 2025, the German Federal Labor Court (Bundesarbeitsgericht or BAG) held in Case No.: 10 AZR 67/24 that certain forfeiture clauses in General Terms and Conditions of Business (Allgemeine Geschäftsbedingungen or...more

King & Spalding

VSOPs – the End of Bad Leaver Clauses in Germany?

King & Spalding on

Virtual Stock Option Plans (VSOPs) are a common tool used by companies to incentivize employees by linking part of their compensation to the company’s long-term success. Unlike traditional stock options, VSOPs do not grant...more

Orrick, Herrington & Sutcliffe LLP

Legal Ninja Snapshot: #ESOP & Flips - U.S. ESOPs for Employees of the German Subsidiary Now Available

Good news! The second chamber (Bundesrat) has now paved the way for the eagerly awaited and much-debated inclusion of a group privilege in sec. 19a of the German Income Tax Act (“EStG”). German start-ups that have done the...more

Orrick, Herrington & Sutcliffe LLP

Legal Ninja Snapshot: #ESOP & Flips — U.S. ESOPs May Become Available for the Employees of the German Subsidiary

Much has been written about the unsatisfactory tax situation of German employees when it comes to equity-based employee stock (option) programs ("ESOP"). Historically, employees were taxed at the time of issuance of shares...more

Orrick, Herrington & Sutcliffe LLP

Zukunftsfinanzierungsgesetz und ESOPs – Wirklich der große Wurf?

Wichtiger Hinweis: Die folgenden (rechtlichen) Ausführungen dienen nur der allgemeinen Information, sind nicht abschließend und stellen keine rechtliche, steuerrechtliche oder sonstige Beratung dar. ...more

Orrick, Herrington & Sutcliffe LLP

OLNS#8: ESOPs, VSOPs & Co – Strukturen / Steuern / Praxisthemen

Mitarbeiterbeteiligungsprogramme spielen für junge Unternehmen eine entscheidende Rolle bei der Gewinnung und Bindung von Top-Talenten. Eine Beteiligung am Unternehmen belohnt Mitarbeiterinnen und Mitarbeiter dafür, dass sie...more

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