In the 2008 Federal Budget, the Government announced new measures aimed at reducing the potential taxation liabilities for some Employee Share Ownership Plans (ESOPs).
The new measures are expected to encourage more companies to implement Employee Share Ownership Plans (ESOPs), which are an effective tool for motivating and providing incentives for management and staff.
Some ESOP advantages are:
· rewards for high-performing staff;
· increasing employee alignment with shareholder interests;
· delivery of objectives and/or Key Performance Indicators;
· a staged succession plan; and
· improved recruitment and retention strategies.
A recent US study found companies with employee equity have a competitive advantage in terms of productivity, and generated higher sales.
Despite the benefits, statistics show that only one in ten Australian businesses have implemented ESOPs, which is in stark contrast to the take up rates in the US and Europe.
As a business owner, it is vital to consider and therefore to develop a program for how you are going to retain high performing management and staff. Successful small businesses are doing this now, are you?
