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Unapproved Share Options
Equity based remuneration can be an effective way to reward executives for loyalty and contribution while reinforcing commitment to the organisation.
Unapproved share option plans are common among quoted companies and can also be implemented in private companies. Such plans do not require any approval from Revenue and are totally at the discretion of the company, subject to legal/regulatory requirements.
What is an option?
A share option is a right given to an employee to buy a share in the employer company or its parent company at some time in the future. The option price is fixed on the day the option is granted. The employee has the opportunity, if there is growth in the share price, to buy shares at less than market value.
What are unapproved share options?
Under unapproved share option plans, rights/options may be granted to purchase shares. It is possible to provide that the vesting of the option is determined by reference to either a service period or performance criteria. Furthermore, a restriction could be placed on the subsequent disposal of the shares which can be tax efficient if employees wish to hold onto the shares.
For further information on the above download a copy of the Unapproved Share Options guide.