FINANCIAL PARTICIPATION
Time to plan your share scheme strategy
The Government's new all-employee share scheme is due to receive royal assent this summer. So, now is the time to consider whether the new plan is likely to match your own business goals and circumstances. A recent issue of Employee Benefits magazine offers some timely, practical advice.
The three articles that make up the 16-page special supplement aim to guide readers through the often complex technical and legal framework regulating share schemes and provide clear practical guidance on how to design and introduce a successful plan.
For the first article Employee Benefits invited a panel of experts to join a debate on current trends in share schemes. The line-up of seven panelists was distinguished and impressively practical, with telling discussions on everything from the future for sharesave in the wake of the launch of the new equity regime, to the options for unquoted companies.
The second report offers a 10-step programme for implementing an approved share scheme (see summary below). Employee Benefits concludes with a brief guide to the various tax-favourable share schemes currently available to UK employers.
10 steps towards implementing an approved share scheme
Adapted from Ingredient for a share scheme strategy , Employee Benefits, February 2000.
| 1. | Decide the aim The scheme you choose must fit in with your company objectives and with your reward strategy. |
| 2. | Work closely with your suppliers and professional advisers Gather a specialised team to help you draft the scheme and deal with legal issues, communication and evaluation. |
| 3. | Draft the scheme rules. Give yourself time — Inland Revenue approval may take as long as 15 weeks. |
| 4. | Get on top of the legal and tax issues. Look at the different income tax and national insurance implications of the various schemes. |
| 5. | Earmark the shares Watch out for rules on newly-issued shares and the cost of the scheme. |
| 6. | Get your administration right Administration costs will be lower if you can supply administrators with accurate, up-to-date information in an electronic format. |
| 7. | Anticipate growth Experience suggests that administration often spirals in later years. |
| 8. | Communication A communication exercise is a key factor in determining the success of a scheme. |
| 9. | During the scheme Regular updates, reminders and explanations of any price dips. |
| 10. | Dealing with maturity Keep maturation forms clear and simple. |
Title: Share schemes supplement , Employee Benefits, February 2000.
Price: £ 4.95
Availability: Centaur Publishing, tel: 020 7292 3719.
Want to know more? email: employee-benefits@centaur.co.uk or visit the Centaur web site at www.centaur.co.uk