Advising employees on share awards

  • Posted

Directors and employees often ask us to look over the share incentive offers they receive from their employers. If it is planned that the share award will form a substantial proportion of overall remuneration they expect to receive, then it is helpful to know what exactly they will receive. We routinely improve the position of employees – especially around the provisions applied in the event that their employment is terminated before the business is sold. We have recently advised employees in the following cases on their share awards:

Gift of shares

Gannons negotiated a gift of shares and an unapproved options grant for a confectionery business director. We negotiated less onerous leaver provisions. As a result, his options were vested in tranches after he completed a certain number of years of service.

Corporate transaction

We ensured a specialist technology company’s employees received similar share option rights after a TUPE transfer.

Loss of an option

Gannons recouped options for an employee who lost his share option because of his company’s negligence. In this case, the promise of an option was not followed up with the paperwork. The business was then sold, and the buyer of the business tried to deny that the option existed.

Amending the terms of an EMI option

We dealt with issues arising when an employer attempted to change the terms of an EMI option. The change would have disqualified the EMI option from tax approved status. Following our advice, the employer changed his mind.

International executive

We advised an employee, who had been granted shares before emigrating abroad to a different country, on the tax implications arising on the exercising of his options in his new country of residence.