The French Supreme Court recently delivered a key ruling on the long-standing issue of inclusion of Stock Options and Restricted Stock Units (RSU) in the calculation of the termination indemnities. Experts have debated about the uncertainty surrounding the inclusion of these elements in the severance and notice period payment for years. The November 15, 2023, judgment has concluded this matter.
In a decisive move, the court declared that Stock Options and RSUs are to be excluded from the calculation of termination indemnities. This decision marks an important stance that could greatly impact many corporations and law firms, particularly those dealing with employee severance and termination packages.
This clarity in legal precedent is exceedingly welcome in the corporate sector, especially against the backdrop of ever-evolving employment laws and employee benefit schemes. The acute necessity for such a decision emerged as modern employment agreements increasingly included Stock Options and RSUs as part of employee compensation. It became crucial to determine whether these elements should be incorporated into calculation bases for termination payments.
Although it took several years to reach a definitive conclusion, the ruling handed down by the French Supreme Court offers a sense of closure to those within the corporate and legal communities grappling with this issue. The final decision that Stock Options and RSUs should be kept separate from dismissal indemnity calculations is likely to map out the course for similar cases in future.
For a more detailed understanding of the court’s judgment, you can dive into Littler’s analysis here.