5 Tips To Maximise Your Share Plan
You are busy so I’ll make this brief. You have invested in a share plan for employees and directors so you want to get the best value from it. Here are some tips.
- Design the Plan to suit your business. You are not a vanilla company so why have a vanilla plan? Include the elements that are important to help your business plan succeed. Work with people who can understand your business.
- Review and if necessary redesign the plan on a regular basis. Like cars and photocopiers, a plan needs to be serviced, upgraded and mended from time to time. An annual check-up and a main review every three years, is what we would recommend. If it is still working, great. If it needs tweaking because you have grown or the business model has changed, you could get more value out of your plan with a few alterations or a revised performance target.
- Tell everyone about the plan. A share plan can reduce staff attrition, encourage engagement and reward for long term success. It is a great opportunity for employees and the company so don’t keep it quiet. You should:
- Include it in your annual benefit statements,
- have a special place for it in your intranet,
- put up a poster in the kitchen, and
- celebrate awards.
Even if not everyone is offered participation, knowing that it could be available as a perk of promotion is still an incentive.
- Make awards on a regular basis. If you give away everything up-front, you diminish the value of the award, tie up a chunk of the share capital based on past performance not future performance and leave the company and employee exposed to price and legislative changes.
- Appoint a Share Plan Champion. Delegate to someone who can understand the plan and has time to promote and run it, to ensure you hit internal deadlines for promised awards and external ones (e.g. HMRC filing requirements) or who liaises with your share plan administrator. It is their responsibility to get the best out of the plan, perhaps make it a KPI to improve take up for share incentive plan awards. This might be someone in HR, Company Secretarial or Finance.
For more information on any of the content covered in the article, please email Fiona.Bell@rm2.co.uk, or call a member of our team directly on 020 8949 5522.