We recognise business requirements are unique when it comes to motivating and rewarding its key staff. Our team of experts work closely with our clients to create well-balanced schemes that best motivate your staff.
How we help
Our team of experts work with you closely to create a scheme with the suitable attributes that best motivate your staff whilst achieving an optimum balance with the following considerations:
- Taxation – how much will your employees be taxed? Will they be taxed now or in the future?
- Vesting criteria – this is key in incentivising your staff and we will advise you how to align the interests of your staff with that of your business
- Existing shareholder and future M & A considerations
- Commercial considerations
Not only do we work with you to devise a customised scheme to achieve the best outcomes having regard to the above considerations, we will manage the on-going accounting and tax compliance required (including employer ATO reporting requirements).
Common types of employee share schemes (“ESS”)
For your consideration, the Common types of ESS include but are not limited to:
- Issue of shares at a discount
- Issue of options at a discount
- Issue of shares at market value, funded by a limited recourse loan – a common structure for start-ups
- “Phantom schemes” – these are schemes which rewards employees by mimicking a generic equity-based scheme but is settled in cash rather than equity.
- Establishing an employee share trust – this is suitable for established companies and listed companies. Whilst this ESS is more complex to set up and operate, this can deliver significant advantages including the ability for the company to:
- Deduct cash contributions to the trust (ESS are normally not tax-deductible)
- Manage ASX director-trading window
- Manage liquidity issue