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The Evolution of Incentive Plans in France: Trends and Challenges
Learn how to manage weather, performance, and liquidity conditions from an accounting, legal, and operational perspective.
Alexandre Léger
Jun 24, 2026
💡 Warning
This article is the result of automatic translation, the accuracy and fidelity of the translation are therefore not guaranteed. To consult the original version of this article, in French, click here.
Over the course of a decade, BSPCEs (Startup Founder Unit Subscription Warrants) and stock options have become essential tools for retaining and motivating talent within French startups. These financial instruments, long confined to a simple vesting schedule, are now undergoing a profound transformation. More and more stakeholders are introducing multiple vesting conditions: not only time, but also performance—whether individual or collective—and sometimes even the occurrence of a liquidity event.
This evolution accompanies the maturation of the ecosystem: we are moving from practices inspired by Silicon Valley to more sophisticated mechanisms—often more tightly regulated—that better align with the requirements of investors and structured governance frameworks.
💡 Key points
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French incentive plans have shifted from simple time-based vesting (1-year cliff + 4-year linear vesting) to multi-condition mechanisms combining time, performance, and liquidity.
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Performance conditions can be financial (ARR, margin, profitability), strategic (product launch, international expansion), or individual (KPIs, deliverables).
- Free share awards (AGA) tied to a liquidity event (IPO, sale) perfectly align employees and investors, but create a binary outcome: without liquidity, there’s no gain—regardless of time spent at the company.
- More sophisticated plans create a double challenge: transparency for employees and accounting and legal robustness for executives.
The Original Model: Time as the Sole Condition
Historically, incentive plans at French startups were modeled after the California model:
- One-year cliff: no options vest until 12 months have passed.
- Linear vesting over 4 years: gradual vesting of rights, on a monthly or quarterly basis.
The goal was clear: to retain employees in companies that were still fragile and highly vulnerable to turnover.
Now-iconic scale-ups like BlaBlaCar and Doctolib used these models to attract key talent—particularly in tech and product roles—by offering them the prospect of future gains tied to the company’s growth.
The Introduction of Performance Conditions
With the rise of French Tech and increasingly large funding rounds (Doctolib, Qonto, Back Market, Contentsquare, etc.), investors and executives began demanding a more rigorous approach: making the vesting of options contingent on performance.
Examples of conditions encountered:
- Financial conditions: exceeding a recurring revenue (ARR) threshold, achieving a certain operating margin, or becoming profitable.
- Strategic conditions: launching a new product, entering an international market, or completing a significant funding round.
- Individual conditions: meeting sales KPIs, delivering a key technical project, contributing to team expansion.
This approach, already widespread among publicly traded companies, is now being applied to private scale-ups. It enables:
- Greater alignment with investors, who want to ensure that value creation is also reflected in incentives.
- Greater perceived fairness internally, as top-performing employees are directly rewarded.
- More nuanced managerial oversight, by linking incentives to the company’s strategic milestones.
Liquidity-Contingent Free Shares: An Emerging Trend
At the same time, another practice is gaining traction in the ecosystem: the grantingof free shares (AGA), where definitive ownership is contingent upon a liquidity event (IPO, business sale, or majority buyout).
Why is this mechanism so appealing?
- It perfectly aligns employees with the exit expected by investors.
- It defers immediate dilution of equity, since the shares are not definitively acquired until the transaction takes place.
- It sends a strong message: “If the company succeeds, you’ll be a full stakeholder.”
Some French Tech companies, in anticipation of an IPO or a strategic merger, have already used these structures. Similar structures exist among publicly traded tech companies: for example, Worldline and Dassault Systèmes tie a portion of their executives’ stock awards to stock market performance and financial targets.
The Limitations
- A binary outcome: if liquidity doesn’t materialize, the employee receives nothing, even after several years.
- An uncertain timeline: it’s difficult to stay motivated day-to-day when the goal is potentially far off.
- Legal and tax complexity: Regulatory authorities closely monitor these arrangements to prevent abuse.
Toward Hybrid and Sophisticated Plans
Today’s reality is one of multi-condition plans that combine several dimensions:
- Time (traditional linear vesting) → to foster employee retention.
- Performance (individual and collective) → to drive motivation and ensure fairness.
- Liquidity (conditional AGAs) → for ultimate alignment with investors.
These plans reflect the next phase of French Tech: companies that are no longer startups, but true European champions with hundreds of employees, structured governance, and international investors.
Challenges for Board Members and Finance Teams
With this sophistication comes a major challenge: the operational and accounting management of these plans.
- How can you easily track, over time, the various conditions applied to each beneficiary?
- How can you calculate the impact in terms of IFRS 2 expenses, given that performance and liquidity conditions affect the accounting treatment?
- How can transparency be ensured for employees so they truly understand their potential entitlements?
Faced with this growing complexity, finance and HR teams must equip themselves with the right tools. Manually tracking multi-condition plans—in spreadsheets or generic tools—quickly reaches its limits: calculation errors, a lack of transparency for employees, and risks of accounting non-compliance.
Industry best practices converge on three requirements: a consolidated view of conditions by beneficiary, an intuitive interface that allows each employee to understand their actual entitlements, and automated tracking of IFRS 2 impacts based on the nature of the conditions applied.
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Managing multi-condition plans
At Equify, we’ve designed a feature specifically built for this new reality:
- For administrators: consolidated, real-time tracking of time, performance, and liquidity conditions—for each beneficiary and each plan.
- For employees: a clear interface that turns legal complexity into practical information—what’s vested, what’s in progress, and what remains conditional.
- For finance teams: an interface to calculate the IFRS 2 expense, taking into account the type of conditions and the likelihood they will be met.
Our conviction: plan sophistication should never come at the expense of clarity. An incentive that’s well understood is an incentive that truly motivates.
Conclusion
French Tech is entering a new era of maturity. BSPCEs and stock options are no longer mere promises of profit for early employees: they are becoming true strategic management tools, reflecting a company’s culture and ambitions.
This sophistication is good news. It reflects the growing alignment between employees, executives, and investors around shared goals. But it also imposes new requirements: greater transparency toward employees, rigorous accounting in the treatment of expenses, and the ability to explain complex mechanisms to teams that do not always have a financial background.
The challenge in the coming years will not only be to design increasingly sophisticated plans, but to make them clear, fair, and sustainable over the long term. Only then will incentive plans remain what they should always be: a lever for building trust between the company and its talent.
What is a “cliff” and why is it important?
A cliff is an initial period during which no options vest. If an employee leaves the company before the cliff ends (typically 1 year), they leave with nothing. This mechanism protects the company against early departures and ensures a minimum commitment before any gain.
What happens if someone leaves the company before liquidity?
It depends on the plan rules and the shareholders’ agreement. A distinction is usually made between a “good leaver” (mutually agreed departure, retirement, termination without cause) and a “bad leaver” (resignation, gross misconduct). A good leaver generally keeps their vested options, while a bad leaver may be forced to sell them at an unfavorable price—or even lose them.
At what company size should you structure incentive plan management?
Once a company exceeds around twenty beneficiaries or starts combining several types of instruments (BSPCE, free shares/AGA, stock options), spreadsheet-based management becomes risky. Calculation errors, missed conditions, and lack of audit trail can expose the company to employment disputes or costly accounting restatements.
How do you explain a multi-condition plan simply to a non-finance employee?
The key is to separate three levels of information: what the employee has already vested for sure, what is currently vesting according to the vesting schedule, and what remains conditional on a future event (performance, liquidity). A visual representation—an individual dashboard—is far more effective than a 20-page legal document.