With businesses shifting toward more flexible work models and complex compensation structures, stock-based compensation (SBC) is quickly becoming a strategic tool for long-term growth. In Episode 5 of The Beehive, we are joined by two of Scrubbed’s leading experts: Rain Soriano, Technical Accounting Services Manager, and JM Respeto, ESG and Sustainability Lead, to discuss the current trends in SBC.
Together, they share how companies are rethinking their SBC strategies in light of remote work, ESG integration, and pay equity.
Why Stock-Based Compensation?
One of the main advantages of stock-based compensation is that it fosters alignment and improves engagement and retention across the organization.
With Stock-Based Compensation, “They (employees) are now motivated to ensure the company’s long-term success, basically aligning their mindset to the mindset of senior management.”
JM Respeto
Companies are also moving away from one-size-fits-all approaches to more performance-based structures, where vesting and payouts are tied to individual and team metrics and not just company-wide profitability.
Rain notes that, “Tying stock-based compensation to performance metrics can align incentives with company goals and promote accountability.” By linking employee rewards directly to measurable outcomes such as revenue growth, operational efficiency, or ESG benchmarks, companies can ensure that employees are not just working hard, but working toward the right goals.
ESG and Stock-Based Compensation
As ESG becomes a greater focus for regulators and stakeholders, an increasing number of companies are integrating it into their stock-based compensation structures. While traditionally, SBC focused only on metrics like revenue or profit, today’s models may include metrics such as carbon intensity reductions or supplier diversity improvements.
JM also emphasizes the importance of established reporting frameworks such as GRI (Global Reporting Initiative), SASB (Sustainability Accounting Standards Board), and TCFD (Task Force on Climate-related Financial Disclosures). These help provide structure for goal-setting and disclosure, helping organizations avoid “greenwashing” and instead focus on measurable impact.
Tax Complexities for SBC in Remote Work
With the growing popularity of SBC, it’s not surprising that more and more companies are adopting this type of pay structure, including those that operate remotely. However, this can lead to complex tax and regulatory challenges. As JM explained, “When you work in different countries, different states for that matter, you’re now under different tax regimes.”
One of the best ways to navigate this challenge is by working closely with legal and tax advisors to ensure compliance while also maintaining employee flexibility. He further notes that organizations should update their policies and invest in technology to track mobility risks.
Stock-Based Compensation for Startups
For startups with tight budgets and early-stage uncertainty, stock-based compensation (SBC) can be a game-changer, as it allows founders to attract and retain key talent without draining limited cash reserves.
But to implement SBC well, it’s crucial to have strategic discipline. Startups must clearly define their goals, benchmark against industry peers, and bring in legal and accounting experts to structure their plans appropriately.
Why Listen to Episode 5
This episode offers a practical and forward-looking overview of stock-based compensation, and covers:
- Remote work, cross-border mobility, and SBC compliance
- The role of performance metrics
- How ESG is influencing modern compensation strategies
- Tips for startups using SBC
- Best practices for aligning pay structures with evolving business goals
Whether you’re a CFO, startup founder, or HR leader, this episode of the Beehive offers timely guidance on using SBC to attract, engage, and retain top talent, while aligning your compensation strategy with emerging global trends.
