What is the award of free shares?

Verified 01 January 2023 - Directorate for Legal and Administrative Information (Prime Minister)

The award of free shares is the operation whereby a company gives its own shares to its employees or managers. It is a complementary remuneration mechanism that aims to motivate and retain certain employees. The company must comply with the allocation procedure laid down by law. Beneficiary employees must comply with tax rules.

A company may decide to allocate its own shares to its employees free of charge.

The beneficiary employee does not immediately become the owner of the shares. It is mandatory that a time elapses between the date of award of the shares and the date when the beneficiary employee becomes owner. This time is called vesting period.

The company fixes the length of the vesting period, but respecting the minimum legal length of one year (except in case of invalidity of the employee).

The company may also freely determine a retention period for shares. This means that the employee cannot sell the shares before the end of this period, even if he has become the owner after the end of the acquisition period.

The combination of the vesting period and the retention period may not be less than 2 years.

An employee cannot therefore resell the free shares received from his company before the expiration of 2 years from the date of award.


at the end of the vesting period, the employee may transfer the shares to a PEE: titleContent up to €3,299.40 if the award of the free shares concerns all employees.

The award of free shares is different from other similar operations which also allow the employee to benefit from the shares of his company:

  • Purchase on terms more advantageous than those on the market (stock options)
  • Purchase via a capital increase reserved for employees who are members of the company savings plan
  • Purchase through reserved sales, on favorable terms (discounts).


if the employee transfers the shares to his company savings plan, he can receive additional payments from the employer (called abundances).

The operation may be organized for the benefit of all employees or for only part of them.

In the case of the award of free shares to the company's representatives, the listed company must fulfill at least one of the following conditions:

  • The business shall award shares free of charge to all its employees and to at least 90% of all the employees of its subsidiaries
  • The business shall allocate options to all its employees and to at least 90% % of all employees of its subsidiaries
  • At least 90% employees of french subsidiaries are covered by a special or voluntary profit-sharing or participation agreement, and the procedures for calculating these agreements are improved before the award of the free shares
  • All eligible employees of the business and at least 90% % of all eligible employees of its French subsidiaries receive an additional payment of participation or profit-sharing

The decision to award free shares to employees must be taken by an extraordinary general meeting.

The decision must specify whether the allocation is to all employees or only to some of them and which ones.

The total number of shares awarded free of charge may not exceed 10% social capital. This percentage shall not take account of the free shares previously granted:

  • whose ownership was not ultimately passed on to the beneficiaries
  • or which are no longer subject to the retention obligation.

The tax on free shares has several different schemes depending on the date of final acquisition of the shares and the date of resale by the employee.