Daily management

14 September 2018

Let your employees get the best out of their bonus!

To motivate and retain their employees, companies have the option to include warrants and options in their reward plan. More and more companies are being seduced by a total offering that is safe and easy to implement.

"The Warrant Plan and the Fund Option Plan are interesting alternatives"

When a bonus has to be awarded to employees that qualify, many managers ask themselves how this variable wage can be maximized. "The Warrant Plan and the Fund Option Plan are interesting alternatives, both for large companies and for SMEs," says Christophe Delbecque, Team Head Employee Benefits at ING Belgium.

Win-win premiums

The main advantage of warrants? An attractive parafiscal optimization thanks to the exemption from social security contributions. "A bonus of 100 euros gross will cost the employer almost 145 euros, and the employee receives about 47 euros, a net employee / employer cost of 30% ratio," says Evelyne Fremault, Consultant Employee Benefits at ING Belgium. "With the Warrant Plan, the company does not provide cash, but warrants that follow the course of the European stock exchanges. From the day of issue, the beneficiary can resell the warrants and, at a constant stock exchange, hope to recover approximately 43% of the employer's costs. "

Tax advantage

With the Fund Option Plan, the profit consists of extra tax savings. "A very interesting tax option, but one that entails an extra risk for the beneficiary, since the option can only be sold after one year. The beneficiary is therefore dependent on fluctuations on the stock market, "says Christophe Delbecque. "In return, at a constant stock exchange, he can count on a net proceeds of about 54% of the amounts invested by the employer."

A complete offer

Since 2017, ING offers its clients employees the possibility to manage their warrants or options directly via an electronic platform. "An effective tool that saves our customers from all the administrative burden. That fits in perfectly with our overall approach, which includes a whole range of complementary services." For example, the Employee Benefits team guides the employer throughout the entire procedure and helps the team, among other things, to inform the beneficiaries about the topic by means of presentations in three languages. "There is also a follow-up, among other things for taxation. This proves to be very useful when we help our clients prepare their pay slips." Finally, the beneficiaries have a helpdesk at their disposal at any time, provided by ING.

Safety before everything

In Belgium, the award of bonuses through warrants and options is governed by a 1999 law. As a pioneer and market leader, ING continually adjusts its instruments to meet the needs of companies as much as possible. The two bonus plans make the best use of the opportunities for optimization provided by the legislation. "Without questioning legal certainty, since ING received a validation from both the tax authorities and the National Social Security Office. An absolute requirement for ING and an important reassurance for companies ", concludes Christophe Delbecque.