Over the last 30 years, Employee Share Plans have become a key part of the remuneration package, for both senior executives and employees generally. Well designed, communicated and administered Share Plans can play a valuable role in motivating and retaining employees, educating them about financial issues and making them feel part of the Group.
MM&K offers companies a comprehensive Employee Share Plan solution, including Design, Implementation and Ongoing Support. We work with a wide range of companies, large and small, quoted and unquoted, many of which have employees around the world.
Our starting point is to identify the share plans which will best help our clients to support their remuneration strategy and human resource objectives in their particular circumstances.
We make recommendations where appropriate on key design choices, such as:
- Types of share plan
- Eligibility and participation
- Size of awards and plan limits
- Source of shares (new issue, treasury or market purchase)
- Performance conditions
- Treatment of leavers
We draw upon our Pay Survey database to advise on market practice, use spreadsheet models to test alternative plan designs and take into account the tax, legal, accounting and corporate governance implications.
We prepare the key share plan documents, including Trust Deeds, Rules, Grant Documents, Shareholders’ Circulars and Board/Shareholder Resolutions.
We have a good working relationship with HM Revenue & Customs (HMRC) and obtain their approval where relevant.
In many cases, we are asked to assist with explanation of the plans to parent companies or institutional investors.
We prepare plain English communication materials for employees, including Employee Guides, and assist with presentations.
Finally, we assist with choosing the best administration approach and with the selection of trustees and other providers.
Our ongoing support includes:
- Agreeing Share Valuations with HMRC
- Monitoring achievement of performance conditions, including calculation of TSR against comparators
- Calculating IFRS 2 share-based payment accounting expense
- Providing updates on changes in regulations and market practice
Share Plan Health Checks review share plan design, documentation and administration procedures to ensure that plans remain up to date and aligned with companies’ objectives.