Presentation Transcript

1. An Introduction to Share Options

   By Gary Watson June 2014
2. Share option schemes Do they work? YES ...AND NO
3. Why would you implement a Share Scheme? TO AID RECRUITMENT TO IMPROVE RETENTION TO MOTIVATE KEY EMPLOYEES COST EFFECTIVE TAX EFFICIENT
4. What are the benefits to your employees? THEY ACQUIRE A STAKE IN THE BUSINESS OPPORTUNITY TO ACCUMULATE WEALTH RELATIVELY RISK FREE
5. 3 categories of share scheme PURCHASE AND AWARD OF SHARES AWARD OF OPTIONS PHANTOM SHARE AWARDS
6. What is an Approved Share Scheme? A SCHEME FOR WHICH CERTAIN TAX BENEFITS ARE AVAILABLE TO EMPLOYEES AND EMPLOYERS EMI CSOP SAYE SIP
7. What is an Unapproved Share Scheme? EVERYTHING ELSE!
8. Enterprise Management Incentive AIMED AT SMALLER QUALIFYING TRADING COMPANIES OPTION EXERCISE PRICE CAN BE DISCOUNTED TO THE MARKET VALUE OF THE SHARES AT DATE OF GRANT ON THE GRANT THERE IS NO INCOME TAX OR NIC LESS THAN 250 EMPLOYEES GROSS ASSETS OF £30M OR LESS AT SALE EMPLOYEES QUALIFY FOR ENTREPRENEUR’S RELIEF AT 10%
9. Company Share Option Plans USED WHERE EMI OPTIONS CANNOT BE GRANTED GIVES YOU AN OPTION TO BUY UP TO £30,000 WORTH OF SHARES AT A FIXED PRICE OPTIONS CANNOT BE EXERCISABLE WITHIN 3 YEARS OF GRANT DATE ON THE GRANT THERE IS NO INCOME TAX OR NIC GAINS ARE SUBJECT TO CGT
10. Save As You Earn MUST BE AVAILABLE TO ALL EMPLOYEES WHO’VE BEEN WITH THE COMPANY FOR A CERTAIN TIME THE PRICE IS FIXED AT THE START YOU CAN SAVE UP TO £500 A MONTH OUT OF YOUR TAKE HOME PAY AT THE END OF THE SAVINGS CONTRACT (3 OR 5 YEARS) YOU CAN USE THE SAVINGS TO BUY THE SHARES THE INTEREST AND ANY BONUS YOU RECEIVE AT THE END IS TAX FREE GAINS ARE SUBJECT TO CGT UNLESS YOU PUT THE SHARES INTO AN ISA OR PENSION AS SOON AS YOU BUY THEM
11. Share Incentive Plan 4 DIFFERENT WAYS YOU CAN RECEIVE SHARES UNDER SIP: FREE SHARES PARTNERSHIP SHARES MATCHING SHARES DIVIDEND SHARES AFTER 5 YEARS THERE IS NO INCOME TAX OR NIC ON THEIR VALUE WHEN YOU ACQUIRE THEM GAINS ARE SUBJECT TO CGT
12. When do Share Schemes Not Work? IF SHARE SCHEMES ARE TO ATTRACT, RETAIN AND MOTIVATE THEN THERE ARE 4 THINGS THAT HAVE TO BE RIGHT: THE QUANTUM QUALIFYING CRITERIA TIMELINE TRANSPARENCY
13. Time line of Investigo 2003 – 2014 The Birth of Investigo London 3RD August 2003 Launch of Hong Kong office Change Management Tax Property Treasury Guildford SAP 2006 2008 2010 2012 Accounting & Finance Procurement & Supply Chain St Albans Strategy Reading Milton Keynes HR Launch of Sydney office 2014
14. GDP 2003-2013
15. Investigo Turnover 2003–2013 £65 Million Forecasted for 2013/2014
16. Darren BurnsDirector – Banking & Financial Services “Investigo is a genuine half way house between a large scale recruitment business and starting on your own. Unlike other ‘Equity’ schemes and empty promises around the market, the EMI scheme at Investigo is very real and very transparent. The scheme is aligned from Day 1. The financial incentive is very attractive and was a huge factor when joining Investigo. This is a huge reward for circa 5 years of hard work. It’s not for everyone, so you should be confident in building a brand and a profitable business. If you back yourself then Investigo have proven to share wealth amongst the group. I interviewed at 9 companies and Investigo came up trumps!”
17. Stuart BonnerDirector – Property “Being a qualified accountant before getting into recruitment, understanding company valuations was something I’d trained in. I guess this made me more cynical than most when it came to offers of share schemes worth nothing. The absolute total transparency of the deal at Investigo has been key for me to believe and trust in it’s potential outcome”
18. Ben Cowan Director - Change Solutions “Apart from the culture and people, a major attraction for me to join Investigo was the transparent and straight forward LTIP.  The scheme relates directly to the performance of the business I run, not on elements outside of my control, which I found particularly appealing. The EMI scheme demonstrates Investigo’s commitment to me, and creates loyalty in return, enabling us to focus 100% on delivering on Investigo’s vision. The EMI scheme, structured as it is, puts my “pay out” destiny in my own hands – something I find extremely motivating.”
19. Terry Dawson Associate Director – SAP “Leaving my last company and choosing to join Investigo was the biggest decision of my life, one of the reasons I chose to join was the LTIP/ EMI scheme that was presented to me. Unlike other share option schemes that seemed confusing and less than straight forward, the Investigo scheme was simple. It will reward me based on the results of my own performance and that of my division, so in simple terms I know exactly how much profit I need to generate for the company in a set period of time in order to achieve my financial goals. This clarity and straight forward approach helps me to focus on my goals and is hugely motivating for me. Investigo has literally given me the opportunity to change my life within a period of 3-4 years!”
20. 3rd December 2013MBO
21. Any Questions? If you would like copies of this presentation please email: Gary.Watson@Investigo.co.uk