creating employee incentive scheme
the challenge:
Our client is in the process of developing and engineering its
own high-tech medical product, and had recently received external
financial backing. The client wished to incentivise its key staff
and management going forward, particularly as the product moved
closer to production. After discussing the issues with our client,
it became apparent that there were going to be four categories of
management and employees to be incentivised, mainly based in the UK
but some with an overseas element as well. Key to the whole project
was working with the external funders, as well as internal
management, to achieve a solution that worked for all.
our approach:
We worked with our client and its external funders to put in
place four share schemes, running alongside each other, using Her
Majesty's Revenue & Customs approved Enterprise Management
Incentive schemes and also unapproved share options. Three out of
the four schemes used complex bespoke performance conditions, to
tie in with the client's expected route to market in the next few
years.
the results:
While the underlying tax law was well trodden ground, the main
challenge was in ensuring that the terms of the share options
worked both for the external funders and for the internal
management, and that the terms of the share options dovetailed with
the existing investment documentation.