Employee equity in difficult economic times

20th July 2023

With the UK close to another recession and inflation running at record levels, businesses are feeling the squeeze for cash.

In contrast to previous recessions however, the job market is still buoyant, with businesses finding it increasingly difficult to attract and retain talent. Against this tough economic backdrop, and to aid with talent retention, employers are looking to offer meaningful rewards and incentives to employees whilst minimising cash spend.

Use of equity incentives
Equity incentives are commonly used as an alternative to cash-based bonus schemes. The main reasons equity plans are often favoured are:

  • The lack up up-front cash layout for the business is appealing, where cash is generally squeezed.
  • The interests of the employees are better aligned with those of the owners.
  • Employees have a higher potential upside compared to cash-based incentives.
  • Equity incentives can be more tax efficient compared to cash-based incentives.

Common incentives mechanisms
Equity incentives are specific to the business in question. However, the most common mechanisms that we see are as follows:

  • Enterprise Management Incentives
  • Company Share Option Plan
  • Growth shares

How haysmacintyre can help
When considering equity incentives, it is vital to design and implement them with the appropriate level of care. haysmacintyre has extensive experience designing and implementing all of the aforementioned schemes and
more.

If you would like to discuss how haysmacintyre can help your business, please contact David Bareham, Share Schemes Director, or your regular haysmacintyre contact.

Awards and Accreditations

Accounting Excellence Large Firm of the Year 2023
eprivateclient top accountancy firm 2023

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