Member Article

Baxter Caulfield reports growth in share incentives

Huddersfield private sector law practice, Baxter Caulfield, claims that it is helping increasing numbers of businesses incentivise key employees with share ownership, impacting “very positively” on clients’ business growth.

The firm, which recently reported an additional £100,000 worth of new transactional work fees over the second quarter of this year, reports that businesses are awarding equity to employees at an accelerating rate. Such ownership is not usually delivered via the Shares for Rights Scheme, which came into effect this month and requires staff to sacrifice employment rights.

More typically, according to Baxter Caulfield, is the use of share options granted under the Enterprise Management Incentives Scheme. This allows the granting of tax advantageous fixed price share options to key employees with a duration of up to ten years, often triggered by a sale of the business.

Further incentives can be provided by use of a Growth Share Scheme, which offers immediate share ownership with the promise of capital return should the value of the business increase.

Share awards have been found to boost employee loyalty and increase profitability, with research by the University of Bradford showing that equity incentives help lift productivity by about 25%. HMRC itself points to a “clear link between employee share ownership and improvements in productivity.”

Stephen Newman, partner and company law expert at Baxter Caulfield, said: “We have set up a number of employee share schemes in recent months. These companies are performing well and satisfied employees, with a real incentive to achieve business growth, are having a positive impact.

“Share schemes are not limited to certain sectors but can be embraced by almost any private limited company.”

He added: “Unlike the Shares for Rights scheme, which came into effect on 1st September, employees do not have to lose their protection from unfair dismissal and rights to redundancy pay and flexible working as the price of share ownership”.

This was posted in Bdaily's Members' News section by David Gatehouse .