Contact: Amanda Kennedy
Deloitte
Manager, Media and Communications
+61 (0) 418 806 477

Contact: Joe Tropeano
Deloitte
Partner, Deloitte Reward
+61 (0) 3 9208 7451

Private companies remain disappointed with the Federal Government’s long awaited Corporations Law reforms around employee share schemes according to Deloitte Reward Partner Joe Tropeano.

“As they stand, these reforms will be largely ineffective in making it easier for private companies to offer shares to their employee,” said Mr Tropeano.

“Attracting, developing and retaining talent continues to be a key business challenge facing organisations, and private companies will unfortunately continue to fight this talent shortage with one hand tied behind their backs.

“Private companies remain constrained by the Government’s policy of continuing with Offer Information Statements (OIS) as their key platform for satisfying regulatory requirements for Employee Share Schemes.

“Offer Information Statements require prepared audited financial accounts complying with Australian Accounting Standards as well as legal costs which together make the cost of preparing one prohibitive for most private companies.

“This is disappointing given that profitable and fast growing private companies valued between $10 million and $100 million, have significantly contributed to our economic growth over recent years, and were hoping for changes to address these onerous requirements.

“The regulators may have taken the lead from our NZ counterparts who have developed an ‘evergreen’ prospectus which, for the most part, could have provided a less onerous model.”

Mr Tropeano said the reforms have practically focused on rectifying some anomalies and technicalities faced by listed companies which were brought about by previous corporate law reforms.

“There are a number of improvements such as doubling the share capital fundraising limit using an OIS and excluding employee share schemes from this limit.”