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Reward

Designing and implementing share-based plans and similar
incentives to support business growth.

Our team provides advice on a variety of share-based reward structures, bonus schemes and similar planning.  We work with management teams, directors, shareholders and other stakeholders to design and implement incentive plans which link personal reward to the performance of a business. Our advice is tailored to ensure that each plan is structured to achieve a commercial outcome for the business and where possible, in a tax-efficient manner. We advise unquoted and quoted companies on best practice and interact with a range of professionals both in the UK and in other jurisdictions to advise multinational corporate groups on reward structures.

Our services include:

  • implementation of tax advantaged and non-tax advantaged share plans for unquoted companies
  • implementation of tax advantaged and Long Term Incentive Plans for companies seeking a listing on a recognised stock exchange
  • advice on global share plans
  • advice on plans over other forms of security, e.g. units in LLCs
  • Employee Ownership Trusts and succession planning
  • HMRC disclosures
  • Transaction related advice
  • Due Diligence
  • Annual reporting of employment-related securities
  • Employment Related Securities compliance.

Case studies

Employee Ownership Trust

Challenge
The company was looking to facilitate greater employee participation in the
employees. Our task was to advise on this commercial alternative.
Solution
Rather than seeking a third-party buyer, an EOT was established and a controlling interest in the company was transferred to the trust. This meant that the current share holders, who retained a minority interest in the company, could continue to provide leadership and guidance whilst the employee workforce begins to take a leading role in driving the direction of the
company. The EOT structure also provided the selling shareholders with the opportunity to claim a zero % rate of UK CGT on the disposal of their shares.  
Outcome
The transfer was completed and the company has begun the next phase of its life cycle. The company has begun the process of empowering employees
to take a leading role in the business.
     
Challenge
The company was looking to facilitate greater employee participation in the
employees. Our task was to advise on this commercial alternative.
Solution
Rather than seeking a third-party buyer, an EOT was established and a controlling interest in the company was transferred to the trust. This meant that the current share holders, who retained a minority interest in the company, could continue to provide leadership and guidance whilst the employee workforce begins to take a leading role in driving the direction of the
company. The EOT structure also provided the selling shareholders with the opportunity to claim a zero % rate of UK CGT on the disposal of their shares.  
Outcome
The transfer was completed and the company has begun the next phase of its life cycle. The company has begun the process of empowering employees
to take a leading role in the business.
     

Overseas share plan

Challenge
The company was based in Australia and wanted to provide an equity incentive to
senior executives in Canada, the USA and the UK. The structure of their proposed plan was a loan-funded share plan. We concluded that there was a simpler structure which could deliver shares to intended UK participants while retaining the business’s commercial objectives. 
Solution
Our role was to advise on a tax-efficient share option plan which could be offered
to a small number of eligible employees in the UK. A Company Share Option Plan was found to be the preferred structure and therefore a global plan consisting of sub-plans which met the commercial needs of the company in each jurisdiction, was designed.  
Outcome
The plan will shortly be adopted and options will be granted as intended. Consequently, UK participants will be provided with an incentive which is aligned to the company’s commercial objectives and provides tax advantages to both the employees and their employer in accordance with the UK share plans legislation.
Challenge
The company was based in Australia and wanted to provide an equity incentive to
senior executives in Canada, the USA and the UK. The structure of their proposed plan was a loan-funded share plan. We concluded that there was a simpler structure which could deliver shares to intended UK participants while retaining the business’s commercial objectives. 
Solution
Our role was to advise on a tax-efficient share option plan which could be offered
to a small number of eligible employees in the UK. A Company Share Option Plan was found to be the preferred structure and therefore a global plan consisting of sub-plans which met the commercial needs of the company in each jurisdiction, was designed.  
Outcome
The plan will shortly be adopted and options will be granted as intended. Consequently, UK participants will be provided with an incentive which is aligned to the company’s commercial objectives and provides tax advantages to both the employees and their employer in accordance with the UK share plans legislation.

Contact us

Caroline Harwood
Caroline Harwood
Partner, Head of Share Plans and Employment Tax
London