An Overview of Tax-Related Matters in Equity Incentives

Colleagues who are about to or have already received an equity incentive agreement should begin studying the relevant tax knowledge. I. Stock Options: 1. On the date of grant (i.e., before exercise), no tax is due. 2. On the exercise date, if the exercise price is lower than the market price on that day, tax is levied on the difference between the two prices. The applicable tax rate follows the progressive individual income tax rates for “salaries and wages” (3%–45%). 3. If the shares are sold on the stock market, no tax is due. However, if the company is not listed or the shares cannot be traded publicly, and the shares (or equity interests) are transferred to another party, tax is levied at a flat rate of 20% under the category of “income from property transfer.” II. Restricted Stock: Generally, taxation follows the same principles as for stock options. However, the formula for calculating taxable income for restricted stock is somewhat more complex, as follows: Taxable Income = [(Stock Market Price on Registration Date + Market Price of the Batch of Shares Released from Restriction on Release Date) ÷ 2] × Number of Shares Released in This Batch − Total Amount Actually Paid by the Grantee × [Number of Shares Released in This Batch ÷ Total Number of Restricted Shares Granted to the Grantee] Example: Xiao Zhang was granted 10,000 shares of restricted stock at a price of RMB 5 per share and registered them under his name. Four years later, the restrictions lapsed. Upon release, the stock price stood at RMB 110 per share; Xiao Zhang subsequently sold the shares at RMB 150 per share. At the time of release, the gain is taxed as “salaries and wages”: Salaries and wages income: (110 + 5) ÷ 2 × 10,000 = RMB 575,000 (actual payment made by the grantee: RMB 0)

After receiving equity incentives, how should individual income tax be calculated depending on the different forms of equity incentives?

To motivate Employee A to enhance work enthusiasm and continue creating value, Company A entered into an agreement with A on December 4, 2023, stipulating that, provided A remains employed with Company A for the next two years, A shall have the right on December 3, 2025 (the exercise date) to purchase 10,000 shares of Company A’s stock at RMB 60 per share. Assuming the stock price on the exercise date is RMB 100 per share, and A has no other equity incentive income in 2025, A’s taxable income = (100 − 60) × 10,000 = RMB 400,000; the individual income tax payable = RMB 400,000 × 25% − RMB 31,920 = RMB 68,080. III. Individual Income Tax Calculation for Stock Appreciation Rights (SARs) Income Pursuant to the Notice of the Ministry of Finance and the State Administration of Taxation on Issues Concerning the Levy of Individual Income Tax on Gains from Stock Appreciation Rights and Restricted Stock (Cai Shui [2009] No. 5), “stock appreciation rights” refer to the right granted by a listed company to its employees to receive gains arising from the increase in the stock price over a specified future period and under agreed conditions. If an employee receives stock appreciation rights, the taxable income for each SAR exercise = (Stock Price on Exercise Date − Stock Price on Grant Date) × Number of Shares Exercised. Assume that on December 4, 2023, Listed Company B entered into an agreement with Employee B, stipulating that, upon completing two years of continuous service and meeting performance targets, B would receive a cash settlement equal to the appreciation in the stock price—calculated as the difference between the stock price on December 3, 2025 (exercise date) and that on December 4, 2023 (grant date)—for a total of 10,000 shares. Assume the stock price on the grant date was RMB 50 per share, and the stock price on the exercise date was RMB 100 per share. Assuming B had no other equity incentive income in 2025, B’s taxable income = (100 − 50) × 10,000 = RMB 500,000; the individual income tax payable = RMB 500,000 × 30% − RMB 52,920 = RMB 97,080. IV. Individual Income Tax Calculation for Restricted Stock Income Pursuant to Cai Shui [2009] No. 5, “restricted stock” refers to a certain number of shares of the listed company granted to its employees under agreed conditions set forth in an equity incentive plan. If an employee receives restricted stock, the taxable income = [(Stock Market Price on Registration Date + Market Price of the Batch of Shares Released from Restriction on Release Date) ÷ 2] × Number of Shares Released in This Batch − Total Amount Actually Paid by the Grantee × [Number of Shares Released in This Batch ÷ Total Number of Restricted Shares Granted to the Grantee]. Assume Listed Company C entered into an agreement with Employee C on December 4, 2023, granting C the right to purchase 10,000 shares of Company C’s stock at RMB 50 per share, subject to meeting performance targets and continuing employment for two years—i.e., until December 3, 2025 (the release date)—before all restrictions are lifted. Assume the stock price on the registration date was RMB 50 per share, and the stock price on the release date was RMB 100 per share. Upon full release of the restricted stock, assuming C had no other equity incentive income in 2025, C’s taxable income = (50 + 100) ÷ 2 × 10,000 − 50 × 10,000 × (10,000 ÷ 10,000) = RMB 250,000; the individual income tax payable = RMB 250,000 × 20% − RMB 16,920 = RMB 33,080.

Ecolab EVP Benjamin Clark Vests 8,843 RSUs and Withholds Shares for Taxes on Nov 2, 2026

Nov 5, 2026

Ecolab Inc.'s EVP of Global Supply Chain, Benjamin Clark, vested 8,843 restricted stock units on November 2, 2026, withholding shares to cover tax obligations.

Kalkine Media

2026-06-10

Ecolab Inc. Insider Trading Activity

2026-06-10

Ecolab Co-COO Sells Shares Worth Over $2.6M

2026-06-11

Ecolab Director Purchases 7,750 Shares in Open-Market Transaction

2026-06-12

Michel Doukeris Purchases Shares of Ecolab Inc (ECL)

2026-06-15

Ecolab (NYSE: ECL) EVP Benjamin Clark Buys 1,000 Common Shares