On Oct. 27, the French Senate is scheduled to consider proposed regulations that could significantly impact offers of stock awards made by U.S. multinationals under French-qualified plans.

The Mouvement des entreprises de France (MEDEF) and the Association francaise des entreprises privees (AFEP) have responded to French President Nicholas Sarkozy’s call for tighter rules on executive compensation. The MEDEF and AFEP have proposed guidelines that arguably would make France’s regulations the world’s toughest on executive compensation. Within the guidelines, there is a provision that provides that companies must offer some form of broad-based stock program (profit-sharing program for all employees) if they intend to offer stock awards to top management.

Though the proposed legislation contemplates only French companies, stock awards offered by foreign companies pursuant to a French-qualified plan could be impacted, as such offers generally are considered to be subject to French company rules (in order to receive the tax benefit).