New law changes some rules for Restricted Stock Units and Performance Shares awards

Posted on 7th January, 2014

Estimated reading time 3 minutes

French law creates a new incentive for companies granting Restricted Stock Units or Performance Shares to all their employees in France.

The French Commercial Code provides that companies may grant RSUs or Performance Shares to their employees and corporate officers of up to 10% of their share capital. Since the introduction of a new law dated 29 March 2014, this percentage has increased to up to 30% for companies, listed and unlisted, which grant such type of awards to all their employees. Where grants are made only for the benefit of certain categories of employees, the limit remains at 10% of the share capital for listed companies and at 15% for unlisted companies.

The difference between the number of awards made to each employee is capped

The same law limits the maximum difference between the number of grants made to employees to a ratio of 1 to 5. For example, if the number of RSUs granted to one employee is 100, no other employee may receive more than 500 RSUs. As is usual, no explanatory comments were issued on these provisions at the time, and some questions remain.

Scope of the new provisions

Although these provisions came into force on 2nd of April 2014, it remains unclear whether the cap relating to the differing level of grants mentioned above applies to all grants or only to grants in plans where all employees participate. It is also not clear if it applies in respect of all awards from successive grants, although Parliamentary discussions indicate that the provision will only apply in the case of plans where all employees are eligible to participate and without regard to previous grants under the same or any other plan.

For further information or to discuss any of the issues raised, please contact Stéphanie Le Men-Tenailleau on +33 1 42 56 38 45 at Lexcom Avocats -


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