Hi,

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?

Some questions:
  1. What percentage of the company shares should be reserved for employee share options?
  2. What legalities are there around share options? In other words, things like share certificates, audit requirements, legal agreements etc...
  3. Once employees have shares, what can they do with them? Can they sell them to public? Should we offer a buy back scheme?
  4. Are there any tax benefits to employees who take share options?
  5. Are there any tax benefits to the company offering share options?


Any advice or suggestions would be appreciated

Regards,
David