In a competitive American labor market, attracting talent is one thing. Retaining it is another.
For French entrepreneurs established in the United States, employee retention is often approached from a compensation perspective: increasing salaries, offering bonuses, providing more flexibility.
But in the United States, retention is primarily a matter of structuring.
And poor structuring can cost far more than a salary increase.
1. The American market: a highly mobile environment
The American labor market has historically been more mobile than the French market. The “at-will employment” model allows both employer and employee to end the employment relationship with relatively few legal constraints.
Result:loyalty does not rely on contractual protection, but on alignment of interests.
In this context, fixed compensation is not enough. Strategic talent expects:
● A growth perspective
● Participation in value creation
● Long-term visibility
Retention therefore becomes a financial tool, not just an HR one.
2. Salary vs value creation: changing the mindset
Many French entrepreneurs still think in terms of annual salary.
Yet in the United States, effective retention often relies on capital alignment mechanisms:
● Equity compensation
● Stock options
● Restricted Stock Units (RSU)
● Phantom shares
● Deferred bonuses
These tools allow an employee to become a performance partner.
They have two major effects:
1. Reducing the temptation to leave
2. Aligning the employee’s interests with those of the company
But they must be structured correctly, particularly in a Franco-American context.
3. The often overlooked tax impact
Implementing an equity plan without tax consideration can create:
● An unexpected tax burden for the employee
● Poorly controlled dilution for the executive
● Reporting complexity in case of a return to France
The taxation of stock options and RSUs depends on:
● The company’s legal status (LLC or Corporation)
● The type of plan (ISO, NSO)
● The beneficiary’s tax residency
● The timing of exercise or sale
A poorly structured plan can become counterproductive.
4. Retention plans are not only financial
Retention does not rely solely on equity.
It can also involve:
● Corporate retirement plans (401(k) with enhanced matching)
● Deferred performance bonuses
● Progressive vesting mechanisms
The challenge is not to multiply benefits, but to create a coherent architecture.
5. Why French executives underuse this lever
Three mistakes often occur:
1. Transposing a French model into an American environment
2. Underestimating talent mobility
3. Ignoring the tax and legal dimension of incentive mechanisms
In the United States, retention is a strategic growth tool.
It directly influences:
● Company valuation
● Operational stability
● Attractiveness to investors
Conclusion
Retaining talent is not about paying more.
It is about structuring value creation intelligently.
For a Franco-American executive, retention must be considered as a financial and strategic tool, integrated into the company’s structure and compatible with cross-border tax constraints.
A well-designed plan strengthens stability, secures growth, and improves long-term valuation.
Olivier Sureau - Partner – USA France Financials Group™
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