Why use a share scheme?

Produced by Tolley in association with

Employment Tax

Guidance

If you talk to enough company directors, it becomes apparent that there are numerous reasons why they have decided to implement share schemes. For the most part, employee share incentive arrangements are only introduced after considerable thought and planning. As a result, there is every chance that they will fulfil an organisation’s expectations.

However, on occasion share schemes are implemented at the suggestion of professional advisers who have not fully explained the benefits. This is clearly not the best route to derive maximum benefit for the company or its employees.

The underlying factors that lead companies to introduce share schemes tend to be very different depending on their size. Ultimately though, the main goal is often to persuade employees to perform better and in doing so help the company to achieve their respective targets.

Size of organisation

Large companies, such as those quoted on the FTSE 100 list, generally offer a number of different share incentives arrangements, primarily because the market and their investors expect them to.

Typically, this will include significant

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