UK Employee Share Plans
Whether in a private or listed company, the use of shares can be an effective way to reward and motivate a workforce, both in the UK and internationally. The design of share plans ranges from those suitable for all employees, to highly bespoke arrangements for just a handful of key roles.
Deloitte provides a complete service from design through to implementation of a share plan. Our advice includes tax, regulatory and accounting considerations as well as reviews of the impact of corporate transactions on equity-based arrangements.
Issues and trends
Following recent market turmoil, considerable changes have been made to the structure of remuneration packages, particularly in the Financial Services sector. In particular, following the introduction of the FSA Remuneration Code, there is more deferral of compensation into company shares. This deferral is becoming seen as ‘good practice’ and is therefore being considered more frequently in other industry sectors.
This, together with changes in the UK tax landscape, has led companies to review their current equity incentive arrangements, to ensure that they properly support the business strategy, support the right behaviours and do not encourage excessive risk taking.
Companies are looking closely at current arrangements to ensure that plans are structured in the most tax efficient manner, whilst ensuring compliance with legal and corporate governance requirements. These reviews range between what might be considered ‘good housekeeping’, through to more innovative structures.
Our solutions
Deloitte’s share plans team comprises of specialists with backgrounds as remuneration consultants, share plan lawyers, accountants and tax specialists who can advise on the following:
- Plan design – designing innovative solutions which support development of the required participant behaviour and meet your commercial objectives.
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- Cost effectiveness – working with finance and treasury departments to establish the most effective approach to funding awards and mitigate the expense of share plans by realising identifiable efficiencies.
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- Tax & Legal – providing specialist advice on the employer and employee tax, regulatory and accounting issues which are associated with the operation of share plans.
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- Implementation – assisting clients with drafting plan rules and other documentation, including user-friendly participant guides which highlight tax and regulatory considerations, both in the UK and globally.
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