Employee share option survey
Deloitte/Norton Rose report
A survey conducted by Deloitte Australia and international legal practice Norton Rose in January/February 2013
A survey conducted by Deloitte Australia and international legal practice Norton Rose in January/February 2013 has found the tax consequences of issuing share options to employees are so burdensome that, although 94% of companies think employee share options are a valuable way to incentivise employees, only around one in three companies (37%) had actually issued share options in the last three years.
Employee Share Option Plans (ESOPs) are widely regarded as a way for fast growth companies, typically short of revenue and capital, to incentivise employees by providing them with shares in the business. However, in Australia 81% of those surveyed, agreed that tax reasons were the main consideration for their reluctance to utilise ESOPs. 75% of those reluctant to utilise ESOPs, went on to say that ‘to a great extent’ the complexity of establishing the plans was a further disincentive to issuing share options.