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Why do companies introduce share plans?

Transcript: Why Do Companies introdcue share plans?


Having an equity awards system in place can be extremely attractive, particularly when the company is perceived as having strong growth prospects. This additional benefit helps attract key industry players to the company as it allows them to participate in the future enterprise value. Having an employee share plan demonstrates that you are keen to engage employees in adding value and this can really help not just in attracting talent, but also in attracting investors.


Providing ownership rights to your staff will often mean people start thinking and feeling differently about the business. Their interests become aligned with those of the existing shareholders as they are further incentivised to increase share value. Enhanced engagement helps to create a shared vision of the future. This can lead to a more productive and efficient working environment.


Why use a share scheme instead of a more traditional cash bonus? The truth is different types of awards will be appealing to different people at different times so you should include various elements on your total reward offering. Share plans can provide significant tax advantages and benefit cash flow. Performance conditions can be attached to share awards to ensure growth is heading in the right direction, sustainably, overtime and not just short-term.


For many companies, individuals are the key to success. This makes staff retention vitally important. Time-based and/or other performance conditions can be attached to many awards to ensure key people stay with the company and achieve your longer-term goals.


The use of employee share schemes can provide an excellent mechanism for slowly passing share capital into the hands of successors in a tax efficient manner. Using performance conditions can help to ensure that successors are ready to take the reins.

How we can help

We are a dedicated team of share plan specialists, with:

  • Expertise to advise on plan design, implementation, communication, and administration, typically for a fixed fee.
  • A record of having implemented over 700 plans successfully
  • ISO9001 accreditation

For more information on share plans, visit our resources section or contact us on 020 8949 5522 / enquiries@rm2.co.uk


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