Authors: Steve Nightingale, Tony Wilkinson
Published: 27 October 2021
Pages: 32

Introduction

An employee share scheme (ESS) is an arrangement between a company and its employees that is designed to give employees an equity stake in the company.
This paper will consider:
a. key scheme design considerations and the various types of scheme (shares, options and “phantom” schemes);
b. key commercial parameters for the scheme (eg pool size, vesting, exercise period, exercise price and leaver provisions);
c. legal compliance matters under company and securities law etc; and
d. the material income tax consequences that arise from various schemes for a company and employees.

Content outline

• Scheme design
• Key considerations
• Scheme types
• Commercial design issues
• Legal issues
• Taxation considerations