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Exploring Employee Ownership Possibilties
There are a lot of choices out there: stock options, stock grants, stock purchase offers, ESOPs, synthetic equity and more. Often, a combination of these tools will get the best results. How do you make sense of it all and consider it in a systematic way?
We can help. At the Beyster Institute, we know that each company is different and that an effective equity program must be tailored to match the goals, values and circumstances of each individual company. That's why we spend a lot of time listening before we begin to offer guidance. Once we have a good understanding of what your company is all about, we'll help you review the various alternatives and the issues that are likely to arise. Working together, we can assemble the elements of a plan that will be tailored to your needs.
The key questions in this process are deceptively simple. It's just a matter of who, what, when, how much, and why. That is:
- Why do you want employee ownership? What are you hoping to achieve? What is your vision for a company in which the employees can participate in equity ownership? This is the first question to sort out, since the answers to the remaining questions will need to be aligned with it.
- Who should participate in the program? Do you want to focus on a select group of key employees, or do you want to create a team culture of ownership throughout the business?
- What equity compensation vehicle(s) will form the basis of the program? There is a veritable alphabet soup of vehicles out there, from ISOs to ESPPs, NQSOs, and ESOPs. Each one has its own particular advantages . and disadvantages. The challenge is to determine what vehicle structure will enable you to achieve your goals most effectively, and most efficiently.
- When will equity be awarded? This involves much more than picking a date on the calendar. Should employees receive equity on a one-time basis, or should it be awarded on a recurring basis? Will stock be awarded only when certain performance targets have been met?
- How much of the company's equity should be transferred to employees? The right answer is "enough to accomplish the purpose of the program." We will help you make this determination.
To begin a dialogue with us, please fill out our Pre-consulting Questionnaire, which will provide us with some basic information about your company. One of our experts will be in touch with you shortly.
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