I have a PTY LTD company of which I hold 100% shares. I am looking at various incentives for employees, one of which is share options. I would like to get suggestions on how this works best.
I have heard of companies that, at the end of the year, offer a bonus OR share options in the company. So essentially, the employee can choose to take the shares or the bonus. This means that those who take shares have a deeper emotional link to the company since they in effect sacrificed a bonus for the shares. Any suggestions on the best way to approach this?
- What percentage of the company shares should be reserved for employee share options?
- What legalities are there around share options? In other words, things like share certificates, audit requirements, legal agreements etc...
- Once employees have shares, what can they do with them? Can they sell them to public? Should we offer a buy back scheme?
- Are there any tax benefits to employees who take share options?
- Are there any tax benefits to the company offering share options?
Any advice or suggestions would be appreciated