"Employees are no longer satisfied with knowing how many options they hold"
Eyal Froind, CEO of Phoenix ESOP, the trustee managing equity plans for some of the world's largest biggest technology companies operating in Israel, on the new platform his team has built and why the expertise behind it mattered more than the code itself
"The complexity in our world lies in the way taxes are calculated. When you sell shares of a public company, you do not necessarily know how much tax will be deducted along the way or how much money you will ultimately receive," says Eyal Froind. "If you're planning to buy an apartment or need a specific amount of money for any reason, what really matters is how much cash will actually be deposited into your bank account. And in many cases, you simply don't know that".
That's according to Eyal Froind, CEO of Phoenix ESOP, Israel's leading trustee and equity plan administrator, managing the equity compensation plans of some of the world's biggest technology companies operating here. Froind has spent more than a decade across the field, in taxation, operations, valuations and trading. From that vantage point he has watched equity move from the edge of a compensation package to the largest asset many tech employees own, while the tools used to manage it have largely remained unchanged.
The scale of that shift is now measurable. According to recent press reports, Israeli tech employees hold roughly 150 billion shekels in vested, in the money options and restricted shares, most of it waiting on an exercise that keeps being postponed. Those reports also indicate that the Finance Ministry and the Tax Authority are weighing a change to how equity is taxed ahead of the 2027 budget.
The weight of the decision sits in Section 102 of the income tax ordinance, the route through which almost all equity awards are granted to employees in Israel's technology sector. Shares deposited with an approved trustee and held there for at least 24 months from the date of grant may qualify for preferential tax treatment, under which part or all of the proceeds may be taxed as capital gains at a rate of 25%.
By contrast, if the shares are sold before the end of the required holding period, the entire gain is generally reclassified as employment income, and the effective tax rate may reach approximately 62% once income tax, National Insurance, and health tax are taken into account.
When it comes to public companies, the situation is even more complex. Even after the 24-month holding period has elapsed, a calculation must still be performed to determine which portion of the proceeds is taxed as employment income and which portion qualifies for capital gains treatment. This allocation is based on the original grant date and the applicable tax rules. As a result, an employee may sell shares from two different grants at the exact same time and share price, yet pay a different amount of tax on each grant.
For these reasons, it is easy to understand why many employees feel they lack the tools needed to make informed decisions about one of their most valuable financial assets. Without clear visibility into taxes, proceeds, and outcomes, determining the right course of action can be a significant challenge.
"Part of it counts as employment income, part of it as capital gains," says Froind. "At the end, you don't really know what you're getting".
What has changed, he argues, is how much now rides on that uncertainty.
"If salary was once the headline in tech, today the equity component is no less significant," he says. "And employees are no longer satisfied with knowing how many options they have. They want a tool that helps them manage the asset, real trading capability, and a clear answer on what it's worth to them".
Phoenix ESOP is now launching a platform built on that premise, treating what an employee holds the way any other position in an investment portfolio is treated.
"We relate to it as a financial asset", says Froind. "Not just telling you how much you have, but how to manage it, what the tax implications are, and what happens when you exercise".
The platform opens with a personal dashboard showing holdings, current value key metrics, and quick access to all major actions. From there, users can drill down into their full grant details and navigate through a visual vesting timeline, with each tranche displayed according to its vesting event. Froind calls that the obvious layer. Above it sits the trading layer, where orders can be submitted across several grants at once, from a mobile application or a web interface, alongside a simulator that models the outcome before anything is sold.
"It shows you at any point how much you would receive and how much tax you would pay," he says. "You can run market scenarios. What happens if the dollar falls or rises, whether you take the proceeds in shekels or in dollars, what happens if the share price moves or your bracket does".
One scenario in particular tends to catch holders off guard, the additional tax owed on capital income once the year closes.
"In a lot of cases people don't put money aside for that day," says Froind. "Here they can model it in advance and decide how much to sell, at what value, and when".
Another capability addresses employees holding American citizenship, for whom the specific tranche sold carries consequences for IRS reporting, not only the grant it came from.
"This is the first time a trustee has given employees with U.S. citizenship the ability to choose the exact vesting tranche from which to sell", says Froind. "For these employees, this is a game-changing capability, as it can materially affect their tax planning and reporting requirements in the United States".
Tracking runs through the same personal area, covering open orders, executed orders and the summary notices showing tax withheld. The simulator also serves employees whose company trades through a global broker rather than through Phoenix ESOP, by loading the broker's report into the system while Phoenix ESOP continues to act as trustee.
The knowledge came before the code
None of it, Froind argues, could have come from a technology team working on its own.
"We went to companies, we presented, we explained, and we listened to what employees were asking for," he says. "A significant part of these features came straight from the field, things people had no answer for until now. Then take our professional, operational and tax knowledge, and we built the system around it".
That knowledge sits with a management team new in its current composition and long in its background, its members carrying between 10 and 25 years in equity plans, taxation and representation, several of them from competing firms. Froind describes the group as covering every link in the chain, from taxation and operations through valuations and technology.
"We took all of that and built the most advanced product there is", he says.
The platform is aimed first at employees of public companies, where shares are liquid and where, as Froind puts it, most of the money in Israeli tech sits. A parallel track for private companies, built around the interface used by the company itself rather than around trading, is already in development.
"For anyone holding options or shares," he says, "this is a tool that changes the picture".
