CLIENT
Manufacturer of semiconductor products, specialising in custom design solutions tailored to meet specific client requirements.
CHALLENGE
The company operates in a highly complex and specialist field, relying heavily on the skills and knowledge of key employees. Since part of the intellectual property resided in the employee base with their specialist skills, this created a critical challenge: how can the business retain these essential individuals in order to safeguard competitive advantage and support ongoing business growth?
SOLUTION
Menzies advised on the implementation of a tax efficient share option scheme, including agreeing a discounted valuation with HMRC. This structure enabled key employees to participate in the equity of the business and benefit from a proportion of the proceeds in the event of a future exit. This was designed to demonstrate to employees that they were valued by the business, without requiring significant upfront financial investment, while offering the potential for substantial future gains.
OUTCOME
The new scheme helped reinforce employee engagement and retention by clearly linking individual contributions to potential financial rewards. By refreshing the share values on a periodic basis, employees could see the increasing value of their equity, which created a psychological incentive to remain in the business. It helped make employees more aware of the opportunity cost of leaving, supporting long-term retention and alignment with the company’s growth objectives.
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