Share Plans and Incentives

Our incentives team provides clear, practical advice on all aspects of employee share plans, incentives and employment taxes helping clients to navigate the maze of tax and regulatory requirements.

Overview

Share plans and incentives are hugely important for attracting and retaining talent as well as increasing employee engagement and motivation by aligning the interests of employees with those of shareholders. The regulatory landscape around remuneration and the provision of benefits and incentives to employees is complex and ever changing with employers continually facing new demands and challenges. ESG considerations for example are becoming increasingly more prominent when introducing performance metrics linked to ESG targets.

Working closely with clients to provide high levels of commercial insight, our incentives team delivers straightforward advice on the design and implementation of reward structures.

We advise employers on practical issues as varied as the implications of employees becoming internationally mobile to the tax treatment of termination payments.

We have been helping clients navigate the maze of tax and regulatory requirements for over 20 years and are renowned and ranked for our practical, business-focused approach. Our multi-disciplined team includes lawyers, chartered accountants and chartered tax advisers.

Our incentives experts are part of the Share Plans Lawyers group and ifsProshare.

Areas of focus

Our expertise in shares plans and incentives includes the following:

Advising on the design, drafting and implementation of Long Term Incentive Plans (LTIPs) for companies listed on AIM and the London Stock Exchange.
Working with our international clients to implement qualifying share plans in the UK for locally based employees. This includes advice on the complex new rules on internationally mobile employees taking part in share and stock plans.
Working with privately held clients to implement share plans designed to support their business plans, be it for long term growth or an exit in the short to medium term.
Working with private equity houses on the design of share structures for executive management teams and the next tier of management.
Advice on the design, drafting and implementation of all the UK employee share plans which qualify for tax advantages, namely Enterprise Management Incentives (EMI), Company Share Option Plans (CSOP), Savings-Related Share Option Plans (known as SAYE or Save as You Earn) and Share Incentive Plans (SIP).
Advising clients who cannot operate a qualifying share plan on alternative structures designed to meet their commercial needs, including growth share plans, deferred share plans, “synthetic” share plans, restricted share plans and cash-based bonus plans.
Advising companies and individuals on employment status for tax purposes including the implications of the use of intermediaries, such as personal service companies and agencies.
Advising companies and individuals on the taxation of settlement and other termination payments.
Helping clients to navigate the financial regulatory regime and associated legal and tax risks.
Advising companies on the taxation of a variety of elements of their reward packages.
Providing advice on employee benefit trusts.

Experience

Advising a FTSE 100 company on the design and implementation of a share-based incentive arrangement for the new managing director of a key subsidiary. The aim was to reward him for the achievement of profit targets over the period of the current business plan.

Designing a new Long Term Incentive Plan in line with corporate governance best practice guidelines and the relevant regulatory requirements for an AIM listed company.

Designing, drafting and assisting with the implementation of an EMI plan with the grant of options to key management for an entrepreneurial business. One management team member did not qualify and as he could not have an EMI option we designed an alternative structure to achieve the same commercial outcome.

Working with the shareholders of a hi-tech media business to implement an EMI plan for key employees to support the company's business plans. Options were granted over issued shares held by the majority shareholder to avoid dilution issues for other investors.

Advising a Luxembourg law firm – one of their clients was to employ an individual with a complex pattern of international working in a number of European countries including the UK. Advising on residence status (for UK tax purposes), and the UK tax and National Insurance implications of a variety of elements of the remuneration package.

Working with the management team of a large fast growing entrepreneurial business on the design of a tax-efficient share based incentive plan for executives and three tiers of management. The aim of the plan was to align the interests of key individuals with shareholders, maximising the growth in the business with a view to an exit in the medium term.

Providing independent advice to a group of over 20 employees of a large hotel group on the implications of entering into Employee Shareholder Agreements with their employer, thereby giving up certain employment rights in exchange for the issue of shares.

Advising an AIM Listed company on a qualifying tax-advantaged all employee share plan, including advice on the new online reporting requirements.

Working alongside a Big 4 firm of accountants in ensuring that the company’s Employer Financed Retirement Benefit plan was dealt with in accordance with the terms of a settlement agreement with HMRC.

Share Plans and Incentives

Areas of focus

Nigel Watson Partner

Richard Knight Partner

Michael Hayles Partner