RM2 > All Employee Share Schemes

All Employee Share Schemes

Make employees owners and most likely they will act like owners. That’s the pretext for broad based share schemes in some of the most successful businesses in the world.

Those businesses owe much of their success to their strong ownership cultures and high employee engagement. Names like Microsoft, Google and Starbucks from the United States and, closer to home, the John Lewis Partnership, Arup and Unipart in the UK are all outstanding examples of businesses which have embedded all-employee ownership into their way of doing business. When you shop in a John Lewis store or a Waitrose supermarket, you deal directly with the owners and you can see the difference that makes. The partners act as if they own the place.

There is also growing evidence that, properly structured, all employee share schemes can improve company performance. The UK Employee Ownership Index, a portfolio of UK public companies with significant levels of non-director employee ownership, has out-performed the FTSE All Share index in nine of the last twelve years. The fifty largest private companies with significant broad based employee ownership increased productivity (defined as value added per employee) by more than 25% in 2014.

In a quoted company, where there is a public market in the shares, a clear market-based value to the shares and plenty of willing buyers and sellers, installing an all-employee share scheme has become a routine task. Popular schemes like Save-As-You-Earn (SAYE) schemes and Share Incentive Plans (SIPs) are common place in most quoted companies.

The UK now has one of the most favourable legal and tax frameworks for employee share ownership in the world. Closely controlled private companies can no longer afford to overlook this. The performance and motivational benefits are clear.

In a private company, where there is no public market in the shares and no immediately available share value, care needs to be taken with the design of the scheme: how it is structured, how it is communicated, how share trades are handled and how leavers are dealt with.

This is where RM2’s long experience in private company share schemes comes in. We have more experience than any other team in the UK in designing, implementing and operating employee share schemes. We’ve worked with hundreds of private companies and established more than a thousand schemes.

To unlock the power of employee ownership in your company, and for a free consultation with one of our technical experts without commitment, call 020 8949 5522 or email enquiries@rm2.co.uk.


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