Employee Share Plans
Increasing employee engagement through share ownership.
Share plans are becoming an increasingly important part of remuneration packages - not only for senior executives, but for employees generally. Companies have found that, when communicated effectively, share plans can help them to:
- Recruit and retain employees, by making remuneration more competitive.
- Motivate employees to meet business objectives.
- Deliver key messages about improving financial performance.
- Make employees identify more closely with the success of the group.
The introduction of approved Share Incentive Plans (previously known as AESOPs) has prompted companies to review their share plans to ensure that they continue to meet their objectives, in the context of their other human resource, reward and employee involvement initiatives. Share Incentive Plans alone provide a range of design options including share awards, share purchases and matching shares. The choice is further extended with savings-related (sharesave) share options, company share option plans, enterprise management incentives, performance and restricted shares, co-investment plans, ESOP trusts and ‘phantom’ plans.
To maximise the effectiveness of their share plans, companies need to:
- Select the design that most closely meets their requirements, in the context of constraints which may be imposed by the business environment, Inland Revenue approval conditions and institutional investor guidelines.
- Communicate the plans to employees so that they appreciate the benefits of participation and understand how they can contribute to financial success.
- Ensure that administration systems are in place so that the plans operate smoothly.
Why Watson Wyatt?
Our clients choose to work with us because:
- We have an experienced team of consultants, some of whom have been advising companies on employee share plans for more than 20 years.
- Using our broad human resources and financial experience, our share plan advice is given in the context of our clients’ overall strategic and human resource goals.
- Our research-based consulting enables us to offer leading edge solutions.
- We can provide a comprehensive share plan service and minimise the implementation process through effective project management.
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