Employee Share Schemes & Plans from The Share Option Centre

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The Share Option Centre

Employees are granted the right to acquire a certain amount of shares in their employing company.

The price is fixed on the date of grant. This is known as the option price.

The employee can normally exercise their options (ie purchase shares) after a specified period, this is called the exercise date.

There may be certain performance conditions to be achieved before the option can be exercised - this will usually be some measure of the company’s performance.

On exercise, the employee can purchase shares at the option price irrespective of the prevailing market price.

If the option price is higher than the market price, the option is said to be underwater and there is no obligation to exercise. Options therefore pose no financial risk to employees.

The employee can hold on to the shares and become a part-owner in the company, called a shareholder. The employee’s rights as a shareholder will be the same rights as other shareholders, including; attending the Annual General Meetings and receiving dividend payments.

The difference between the market and option price represents a profit for the employee, if they decide to sell the resultant shares.

Employers and employees can both benefit from favourable tax legislation.

There are various types of share plans - click here to find out more.

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Latest News

January 2012:
QinetiQ Bosses Hit Jackpot and Forego Share Options
QinetiQ's top two executives, Sir John Chisholm and Graham Love, have reputedly withdrawn from a share option scheme just prior to the company's £1.3bn floatation, taking place next month.

January 2012:
ABI Guidelines: Update
The Association of British Insurers ("ABI") has made available on its website its revised 2011 guidelines: 'Principles and Guidelines on Remuneration". The revised guidelines were approved in mid December.

January 2012:
Bankers' Options Reach $100bn as Shares Surge
Figures compiled by Financial News published mid-January indicate that the recovery in banking stocks has left staff at the biggest US and European banks with share options worth a total of almost $100bn at the start of this year.

December 2011:
IFS ProShare Awards Dinner
On Tuesday 6 December, The Share Option Centre and MM & K hosted a table at the IFS ProShare Awards Dinner in Park Lane’s prestigious Hilton Hotel. Guests included share plan professionals and those with a real interest in fostering employee share ownership.

November 2011:
Drinks Party to Welcome The Share Option Centre
Thursday 10 November saw around 50 share plan industry friends join MM & K Limited, the specialists in delivering business-driven compensation strategies, as they welcomed The Share Option Centre to the firm.

October 2011:
Accounting for Share Options - AIM Listed Companies
The new accounting standard on employee share plans will soon begin to have a direct impact on AIM-Listed companies' reported profits. Lane Clark & Peacock LLP are giving a breakfast briefing on Wednesday 9 November to cover the issues, possible impact on your accounts and how you can manage the P&L charge effectively.

September 2011:
Share Option Centre joins MM & K Limited
As part of our continued commitment to further enhance our client services, The Share Option Centre joins with MM & K Limited with effect from 1st September 2011.

December 2010:
Flotation of Allergy Therapeutics Plc
The Share Option Centre has been selected to administer and communicate the employee share plans of this specialist pharmaceutical company for its flotation on The Alternative Investment Market.

November 2010:
Employee Share Plan Health Check
Getting the best from your Share Plans -Employee Share Plan Health Check - introducing a brand new and unique service dedicated to maximising the benefits of your Share Plans.

August 2010:
Google Share Option Blunder
Internet search engine company might have breached stock market laws by ommitting shares and options issued to staff.

July 2010:
Article: 'The Changing Face of Share Plans'

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