Trends and challenges in employee share ownership

Finn L. Dahl at Equatex talks market trends, customer challenges and company behaviour in today’s market.
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What are the worldwide trends in employee share ownership? Why is employee ownership important to modern business?

 

“There is an increasing behaviour of companies to offer broad based employee share plans. Long gone is the time where share plans were limited to only the most senior levels of corporate management. The pressure on future generation pensions and non-equity rewards have encouraged companies of all sizes to introduce share plans for employees.

We’ve started to see businesses move away from option plans as they are often viewed as excessive risks, however, these plans might still be the most sensible for companies in a start-up phase or with a binary outcome (e.g. pharma). Full value plans are becoming the preferable choice for most. Significant tax breaks are in place in multiple jurisdictions to reduce taxes associated with such plans if structured correctly. Employers are experiencing an increase in employee loyalty and productivity and staff are developing a sense of ownership and commitment to their company.

I think employee share plans are very important to modern business as they underpin the success of a company. A business that is run by staff that are as committed and as passionate as the owner will increase the customer and employee attraction rate, talent retention, staff motivation and in turn profitability.”

 

What are the most challenging issues your customers are facing and how are you helping to overcome them?

 

“Finance departments are facing increasing pressures to improve their processes. Externally, regulatory bodies are adding and changing standards, which places more responsibility to comply. Internally speaking, businesses are expected to improve their understanding of the tax and legal impact, particularly when operating across different countries.

Many of our customers come to us because they are in need of a powerful and easy to use system that improves the quality of their accounting and financial reporting. They want to eradicate monstrous spreadsheets and cumbersome tasks and reduce their business risk and liability.

Our customers operate in many countries and need a solution that can support the local entities and business units, as well as ensure that mobility is tracked across the group and accounting and tax items treated accordingly. Our solution allows our customers to access the service anywhere in real-time and ensure efficient and accurate financial reporting both at local and group level. We ensure our clients are equipped with a fully fledge accounting system compliant with IFRS and USGAAP, as well as providing access to our Financial Reporting Competence Centre.”

 

What is EquatePyramid? What are its key benefits?

 

EquatePyramid is our market leading enterprise solution for equity plan accounting and financial reporting, fully tailorable and compliant with IFRS and US GAAP. EquatePyramid can receive feeds directly from company records, participant and transactional data from current provider to report in real-time and also allows users to report in up to 6 accounting dimensions such as cost centre, business unit or product line.”

 

What are the characteristics of the most successful share plan implementations?

 

The most successful share plan implementation will require all aspects of the business to be considered. It is important that all the necessary departments including finance, legal and tax teams are involved in the initial design phase as well as the decision making. Companies that take a holistic approach from the start of the project will ensure that the financial, legal and regulatory elements are thoroughly taken into account to ensure a successful implementation. HR, finance, legal and tax teams need to all work together to ensure they get the best out of the share plan system for user experience, accounting, reporting, and employee satisfaction.”

 

Find out more about EquatePyramid here.

 

About Finn

Finn L Dahl

Finn Dahl, Head of Nordics, Equatex.

 

Customers come to us because they are in need of a simple, streamlined system that improves the quality of their financial reporting.

Finn L Dahl is the Equatex resident expert on accounting and financial reporting for equity plans. Based in Oslo, he heads up our Nordic region office and has over 10 years experience in Financial Services and equity plans reporting.

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Communication team at Equatex AG
Equatex provides international employee and executive compensation plan services for today’s global enterprise, supporting clients with participants across Europe, Asia, Australia and America.

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