mozilla/5.0 (windows nt 10.0; win64; x64) applewebkit/537.36 (khtml, like gecko) chrome/132.0.0.0 safari/537.36 Test

https://www.google.com/

An introduction to deferred share bonus plans

Produced in partnership with Jeremy Glover (Share Schemes)
Practice notes

An introduction to deferred share bonus plans

Produced in partnership with Jeremy Glover (Share Schemes)

Practice notes
imgtext

Deferred share bonus: key elements

Deferred share bonus plans are typically constituted by the following key elements:

  1. •

    they are structured as employees’ share schemes as defined in section 1166 of the Companies Act 2006 (CA 2006)—see Practice Note: The Companies Act definition of employees' share scheme and its implications

  2. •

    participants are typically also participants in the company’s annual bonus plan. Participation will usually be at the discretion of the directors/remuneration committee

  3. •

    participants may either be required to defer a proportion of their bonus under the annual bonus plan or may be invited voluntarily to defer a proportion of their bonus under the plan

  4. •

    participants will receive an award relating to shares in the company in lieu of the proportion of their cash bonus deferred into the deferred share bonus plan

  5. •

    participants will commonly be provided with the opportunity or right to receive free additional matching shares from the company which will vest at some point in the future

  6. •

    the additional matching shares will normally be subject to performance targets (usually corporate

Jeremy Glover (Share Schemes)
Jeremy Glover (Share Schemes)


Jeremy is a senior incentives lawyer who has over 18 years' experience advising businesses on their employee and executive incentives and share plans. Jeremy's practice focuses on the field of remuneration, executive pay, employee share plans and management buyouts. Jeremy advises a broad range of clients including multinationals, quoted companies, privately owned companies (family, owner-managed businesses, venture capital backed and private equity backed). He also provides specialist expert advice to other professional advisers such as accountants, tax advisers and remuneration consultants for their clients. Jeremy has worked in private practice and in-house and enjoys advising clients using the benefit of both perspectives. Jeremy used to head up the incentives practices at Reed Smith LLP, Stephenson Harwood LLP and the Entrepreneurial Group at EY in London. Jeremy is now a senior consultant to a number of law and accounting firms including Reed Smith LLP, PWT Advice LLP and Jurit LLP. Jeremy is also the CEO of start-up 6S Infinity LLP which, inter alia, provides legal documentation services. Jeremy has a first class LLB from Exeter University and a first class MBA from Cass Business School.

Powered by Lexis+®
Jurisdiction(s):
United Kingdom
Key definition:
Deferred share bonus plan definition
What does Deferred share bonus plan mean?

A deferred share bonus plan is an employee share incentive scheme where some/all of the employee’s bonus is paid in shares instead of cash, and payment of the shares is deferred for a specified period, during which the participant must remain employed in order to receive the shares.

Popular documents