New Year’s Resolution? Are you ready?

Suddenly it’s December … Where did this exceptional year go?

If you had big
plans to put in place a share plan for employees this year, but you’ve not
quite got around to it you could
start working on a 2021 New Year’s Resolution now & have your employee
share plan ready to roll by the start of April.

Here’s what you
need to do:

  • Know your
    business/shareholders. Your adviser will check your articles and any
    shareholders’ / investors’ agreements as part of the process, and you may need
    approval before you go ahead – do you have buy-in? Are all your company
    documents up to date and have all filings been completed correctly?
  • Clarify your
    objectives Whether it’s reward for past loyalty, or motivation for future
    growth, or a mix of the two, if you have a clear reason to implement the plan,
    everything else will fall into place much more easily.
  • Decide on
    participants. Is the plan for everybody, or just for the key drivers in your
  • Set some limits.
    How much do you want to share with employees? What value do you think
    they should receive, and when?
  • Have a timetable.
    Make sure you’ve got a clear idea when you’d like to make awards to employees,
    and stick to it.

Having a solid
basis means that you can put in place an employee share plan quickly. That’s
important because needless delays have several consequences:

Employees who
have been promised rewards by a certain date, but don’t get them, become
disillusioned and demotivated – sometimes even to the point of leaving.

In a growing
business, every day’s delay means an increase in share value – not what you are
looking for with equity-based rewards when you want to award shares/options
with a low value to maximise long term reward.

A substantial
change in your business could mean your business no longer qualifies for
certain types of plan – particularly the Enterprise Management Incentive (EMI).
Delaying implementation might mean you miss the boat entirely.

In short, delays
cost money.

We don’t
recommend rushing things. A typical timeframe for an EMI plan might be three to
four months from initial instruction to award/grant date, which would include
seeking a valuation from HMRC.

Don’t delay – contact RM2 today at Our advisers
will happily schedule an initial call to discuss your share scheme and employee
ownership requirements.