Why introduce an Employee Share Scheme?

Below is a list of 10 reasons why companies and their advisers should consider the introduction of an employee share scheme arrangement.

Please note that none of these reasons are mutually exclusive of each other. The company can choose to operate an employee share scheme for all, or any combination, of these reasons.

  1. To provide a basis for employee motivation and incentive.

  2. To enable the company to meet its recruitment requirements.

  3. To act as a retention tool for quality employees.

  4. To expand the basis on which employees are rewarded for their work.

  5. To encourage consensus between shareholders, management and employees.

  6. To enable employees to think like shareholders.

  7. To encourage interest in the business from within the workforce.

  8. To assist in succession planning where a proprietor is planning to retire.

  9. To facilitate a management buy-out.

  10. To secure tax efficiencies for the purchase or sale of shares.

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