… you would like your key persons to become shareholders of your company and to align the incentive structure with your company’s long term success
In an employee share participation plan, a company sets forth the rules under which it grants shares to its employees and board members.
The goal of the plan is broadly to incentivize key persons to stay with the company and perform by allowing them to participate in its financial success.
The rules set forth in the plan substantially determine the value of the shares. Because the shares are generally treated as part of the salary for tax and social insurance purposes, employers are well-advised to use valuation methods that are recognized by the competent authorities and carefully draft those provisions of the plan that affect the value of the granted shares.
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