Incentivising your staff - are share options the way forward
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By Natalie Wright
Are your employees facing a salary freeze/reduced bonus entitlement
this year? If so, do you have a share option scheme in place
that could be used as an alternative to incentivise/reward employees or
have you thought about putting one in place?
A majority of UK listed companies offer employees participation in
share plans as part of their remuneration package. This is
less so in private companies and interestingly, the main reason given
is simply that they either havenít thought about it, or they have, but
consider that it would be too expensive or complicated to put in
place. However this may not necessarily be the case.
The Enterprise Management Incentive (EMI) Scheme is a flexible scheme
with relatively minimal regulatory requirements compared to
"Revenue-approved" share schemes. The EMI scheme is normally
used for key management employees in smaller to medium-sized (and
possibly higher risk) companies that are aiming for substantial capital
growth. If the strategy of a business is a future trade sale
or some other form of exit, then share options, if structured in the
right way, usually attract very favourable tax treatment for both the
employee and the employer.
Most employers are facing challenges this year but it is also important
to focus beyond this time. When funds are tight, and company
values are low, it is a perfect time to consider share options as a way
to recruit and retain talented and valuable employees.
We can help you identify which type of scheme is best for your
business as one size does not fit all. In some
cases, you may need a full share option scheme put in place, and in
others, it could be as simple as a one-off document. Please
feel free to contact the Corporate Department if you think you might
benefit from a preliminary discussion on the various options available.
© Davenport Lyons 2009. All rights reserved.
This document reflects the law and practice as at March 2009.
It is general in nature, and does not purport in any way to be
comprehensive or a substitute for specialist legal advice in individual
About the Author
Davenport Lyons [www.davenportlyons.com]
is an international business law firm based in the West End of London.
has an excellent reputation in areas spanning corporate to property,
to intellectual property, music to film finance and digital rights to
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Article Published/Sorted/Amended on Scopulus 2009-03-26 01:14:35 in Employee Articles