HR Administration

Aon Employees Face Tax Hit in HQ Move to London

By Steve Daniels

Jan. 24, 2012

Aon Corp. laid out some bad news for its U.S. employees who hold company stock: They may owe taxes after the corporate headquarters moves to London.

Employees who hold stock outside a retirement plan will be subject to capital gains taxes, the Chicago-based company said in a memo to employees that was filed with the Securities and Exchange Commission. About 34,000 of Aon’s roughly 59,000 employees are in the U.S.

“The transaction is not a tax-exempt exchange, and U.S. colleagues that own shares could recognize a capital gain . . . in connection with this event,” the company said in its note, sent Monday.

It also gave employees of Lincolnshire-based corporate consultant Hewitt Associates Inc., who became Aon workers after the insurance giant bought Hewitt in late 2010, a solid idea of how much they will owe the taxman on their converted Hewitt shares.

Their basis in Hewitt stock that was converted to Aon’s will be $39.235 per share. With Aon shares trading at about $47, that means they’re facing at least a 15 percent tax on about $8 a share — a hit of about $1.20 a share.

In general, Aon said, employees holding shares outright will pay taxes on the difference between the value of the stock when the exchange takes place and the value of the stock when they acquired it. These include restricted stock awards that have vested, exercised stock options, stock acquired through the employee stock purchase plan and performance-plan shares that have vested.

Taxes in general won’t apply to shares held in employees’ 401(k) plans, unvested options and restricted stock awards, vested options not yet exercised and shares acquired via the current employee stock purchase plan, which began Jan. 1 and closes June 30, the company said.

Aon said it has hired PricewaterhouseCoopers to answer employees’ questions. But, the company said, “If you have a personal tax adviser, we recommend you speak with him or her about this topic.”

Aon spokesman David Prosperi declined to comment when asked whether the company would ease holding requirements on senior executives who must maintain certain percentages of Aon stock.

Aon surprised the world when it announced Jan. 13 that it planned to move its headquarters from its namesake tower in downtown Chicago to London. One of the reasons its executives cited for the change of address was lower corporate taxes in the United Kingdom.

Filed by Steve Daniels of Crain’s Chicago Business, a sister publication of Workforce Management. To comment, email

Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.


blog workforce

We build robust scheduling & attendance software for businesses with 500+ frontline workers. With custom BI reporting and demand-driven scheduling, we help our customers reduce labor spend and increase profitability across their business. It's as simple as that.

Book a call
See the software

Related Articles

workforce blog

HR Administration

Policy management: What is it and what does it look like for HR?

Summary Policy management involves the creation and maintenance of administrative procedures and guidel...

hr policy, policy automation, policy management

workforce blog


Minimum Wage by State in 2022 – All You Need to Know

Summary The federal minimum wage rate is $7.25, but the rate is higher in 30 states, along with Washing...

federal law, minimum wage, pay rates, state law, wage law compliance

workforce blog

HR Administration

Rest and lunch break laws in every US state

Summary Federal law does not require meal or rest breaks Some states have laws requiring meal and rest ...