Example Of An Employee Share Plan Helping Boost Profits

Employee Share Plans can often prove very valuable in helping to motivate key personnel to improve performance and company results.

That’s exactly what happened in this recent example.

A successful family owned business had operated since 1972 and had grown to a total staff of 15. The founder and his wife owned all of the shares in the Australian operating entity and a portion of the shares in related offshore businesses.

Like many successful companies, the founder realized he needed to address the question of succession and the retention of key personnel, in particular his right hand man.

After considering different options, he decided that an Employee Share Plan would provide the right tax efficient solution.

The plan that was established acquired shares in the Australian company over a period of time and it contained vesting conditions, dividend rights and rules regarding the ability to dispose of the shares.

The key manager was delighted with the scheme and the opportunity it provided for him to build substantial wealth as the results of his efforts.

The results of the Employee Share Plan more than met the expectations of everyone involved. Since the plan was established, company turnover has increased 80% and profitability by an amazing 388%

Given this success, the company is looking to use the same mechanism to increase the share ownership of the plan and so providing further rewards to key management and an effective way to retain key personnel at the company.

Employee Share Plans can be a very way to motivate and retain key personnel in businesses of almost any size. They are not limited to large companies. At Peter H. Hunt & Associates, we have helped many companies take advantage of this flexible vehicle. If you’d like to know more, simply click on the “Contact Us” button at the top of the page.