My client is interested in granting share options to a number of employees under the rules on enterprise management incentives (EMI). My client plans to make the options exercisable on the eventual sale of the business but wants to link the options to the employees’ performance. Are there any issues with attaching performance conditions to the options?
Answer
Linking the right to exercise a share option to employee performance is commonly discussed in the context of quoted companies where investors are very keen to ensure that employees’ share awards will not pay out unless targets are met.
The types of performance conditions used by public companies are unlikely to be relevant in a private company context and on the whole do not measure...
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My client is interested in granting share options to a number of employees under the rules on enterprise management incentives (EMI). My client plans to make the options exercisable on the eventual sale of the business but wants to link the options to the employees’ performance. Are there any issues with attaching performance conditions to the options?
Answer
Linking the right to exercise a share option to employee performance is commonly discussed in the context of quoted companies where investors are very keen to ensure that employees’ share awards will not pay out unless targets are met.
The types of performance conditions used by public companies are unlikely to be relevant in a private company context and on the whole do not measure...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
