Share Ownership Schemes

Share ownership schemes are a type of non-pay financial benefit offered by employers, in which employees are given the opportunity to purchase shares in the company or are given shares as part of their compensation package. These schemes are designed to align the interests of employees with those of the company, as employees have a vested interest in the company’s success.

There are several types of share ownership schemes, including:

1. Share option plans: Share option plans allow employees to purchase shares in the company at a discounted price. Employees are given the option to purchase the shares at a predetermined price, known as the exercise price, at a later date.
2. Share incentive plans: Share incentive plans give employees free shares in the company, either as a bonus or as part of their regular compensation package.
3. Save-as-you-earn schemes: Save-as-you-earn schemes allow employees to save a certain amount of money each month, which is then used to purchase shares in the company at a discounted price at the end of the savings period.
4. Share purchase plans: Share purchase plans allow employees to purchase shares in the company using pre-tax income, often with a discount on the market price.

Share ownership schemes can provide several benefits to employees, including:

1. A sense of ownership: Share ownership schemes can help employees feel more invested in the company’s success and more engaged in their work.
2. Financial benefits: If the company performs well, employees may see an increase in the value of their shares, providing a financial benefit.
3. Alignment of interests: Share ownership schemes can align the interests of employees with those of the company, as both have a vested interest in the company’s success.

Overall, share ownership schemes can be an effective way to incentivize employees and align their interests with those of the company, while also providing potential financial benefits.