Are share incentives inevitable?
The tax press seems convinced that employee share schemes are set to boom. Essentially this is the consequence of a number of different factors:
- the Government has shown its disapproval of the payment of bonuses to bankers and potentially other City high rollers. One of its preferred solutions is share incentives. It seems likely, therefore, that this will happen in the large institutions
- for the SME market, money is tight. If there is no cash available, the only “option” may be to take advantage of employee share incentives. These can offer a valuable reward with no cashflow implication
- lower stock prices generally means that it is possible to grant options or sell shares now at low prices.
This area is definitely worth a second look.
Cathy Corns is a tax adviser and a partner at Mercer & Hole. The views given in this blog are personal to the author, if you would like to discuss the contents of this blog with Cathy you can call her on 01908 605552.
Date: 9th November, 2009
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