This is the one where employees do not have to pay the income tax that would normally be charged on the market value of any shares or options granted to them.
If employees are given options under an approved EMI, they are only charged capital gains tax at 10% on the increase in value over what they pay for the shares (the option's 'exercise price'), so long as that price is at or above the market valuation of the shares on the date of granting the options.
If I purchased them as options, different things would apply. But I'm happy paying tax on income of it means I get the shares for free.
The change in price if the shares is taxed as capital gains though.
Stock gain does account for a significant portion of comp the past couple of years though so it’s not a small thing.
Options (vs RSUs) also have slightly different mechanics.
Gains after vest can't really be counted as comp, since anyone else could have bought those same shares and made those same gains. That's just investment income; attributing it to your employer/employee relationship is silly.
Actually for RSUs you are taxed at vest, so it's your pay tax rate (probably in the realm of 35%+). What's taxed at 15% after a year is any additional gain from vest time. So if you get 4 google stock at $1000 a piece, they sell 2 to cover your tax liability, refund you the difference between $2000 and .35*4000, and you get 2 stocks you've just paid full taxes on. If in a year they're worth $1200 a piece, you can pay additional taxes of only 15% on the $400 you just made by holding onto them.