Employee rewards
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Published: 21 Jan 2019
You may well ask “what has employee rewards got to do with private company valuation and sale?”
Unless your company is run by robots (and even they need to be monitored by human beings) engagement of employees and senior management is critical for the success of the company and therefore its investment or sale value.
You may run a bonus scheme linked to the gross margin (like Timpsons) or the pre-tax profits of a department or the company (like John Lewis).
Employee shares or options
On the other hand, to achieve a more long-term objective of growth in share value, the allocation of shares or options to employees can be beneficial in retaining employee loyalty, improvement in company performance; using this method can also be more tax efficient than a straight forward bonus.
There are a number of tax efficient employee share schemes recognised by HMRC. If you are interested in taking this further, I recommend that you contact Sarah Anderson of employee share specialist, The RM2 Partnership Limited.
Employee Ownership Trust
As a business owner you may be reaching the stage of succession planning and selling the company in a most tax efficient manner.
A UK Employee Ownership Trust (EOT) may help you achieve this by selling at least 51% of the shares to an EOT, which would hold the shares on behalf of all the employees in the company.
The day to day running of the Company can remain with its existing management. Richard Cowley of RM2 Partnership Limited, would be glad to assist with the establishment of an EOT.
Please contact David Cane on 07749 080 806 or by email if you wish to initially discuss any of the foregoing.
