Incentivising employees : the theory, policy and practice of employee share ownership plans in Australia / Ingrid Landau, Ann O'Connell, Ian Ramsay.

Format:

Book

Author/Creator:

Landau, Ingrid, author.

O'Connell, Ann, author.

Ramsay, Ian, author.

Language:

English

Subjects (All):

Employee ownership--Australia.

Employee ownership.

Employee stock options--Australia.

Employee stock options.

Physical Description:

1 online resource (249 pages)

Edition:

1st ed.

Place of Publication:

Carlton, Victoria : Melbourne University Press, 2013.

Summary:

Employee share ownership has the potential to generate a culture of enterprise and innovation, and build national wealth and savings. This book is the culmination of a multi-year research project funded by the Australian Research Council and represents the first detailed discussion of the theory, policy and practice of employee share ownership plans (ESOPs) in Australia. The topics examined in the book are key legal and policy issues relevant to ESOPs, the current incidence and forms of ESOPs in Australia, the corporate law and taxation law frameworks, why employers implement ESOPs and why employees participate in them, international comparisons, and recommendations for reform.

Contents:

Intro

Incentivising Employees

Contents

Preface

Introduction

Notes

1 Key legal and policy issues

Rationales for employee share ownership

Improving enterprise performance

Industrial relations objectives

Contributing to national savings

Promoting innovation

Remuneration objectives

Other objectives

Key criticisms of employee share ownership

Different perspectives on employee share ownership

The employers' perspective

Do ESOP employers perform better than those without ESOPs?

Why do employers implement ESOPs and why do employees participate?

Characteristics of companies adopting ESOPs

Majority employee-owned firms

The employee perspective

Employee share ownership and employee participation

Does participation in an ESOP influence employee attitudes and levels of commitment to the organisation?

Employee share ownership and trade unions

Employee share ownership and corporate governance

Conclusion

2 Current incidence and forms of employee share ownership plans in Australia

Existing empirical data

Overview of key studies

Incidence of ESOPs in Australia

Trends over time

Type of plan

Awareness of employee share ownership

Characteristics of companies with employee share ownership

Sector

Company size

Securities market listing

Characteristics of employees receiving shares

Type of employment

Occupation

Trade union membership

Summary of existing empirical data

The Employee Share Plan Survey

Method

Sample

Findings: Incidence of ESOPs and objectives

Incidence of employee share plans

When plans were adopted

Number of plans

ESOP structure

Types of equity offered under the plan

Value of securities

Company contribution to the value of employee securities

Form of employee contribution.

Maximum employee contribution

Eligible employees

Minimum period of employment requirement

Link with performance hurdles

Manner of determining allocations to individual employees

Restrictions imposed on entitlements

Restrictions imposed on the disposal of employee securities

Minimum holding period

Use of trust structure

Employee involvement and participation

Maximum percentage of equity available to non-managerial employees

Percentage of equity currently owned by non-managerial employees

Percentage of non-managerial employees participating in the plans

Employee involvement in corporate decision-making

Company views on the regulatory framework

The perceived impact of the regulatory concessions

Views on regulatory reform

3 The corporate law framework

Disclosure requirements when issuing securities to employees

General requirements under the Corporations Act 2001 (Cth)

Statutory exceptions to disclosure requirements

Small-scale offerings

Persons associated with the issuer

No consideration

ASIC relief

Offer information statement (OIS)

Financial products disclosure and related issues

Funding employee share schemes

Restrictions on a company acquiring an interest in its own shares

Restrictions on a company financially assisting a person to acquire its shares

Employee share buy-backs

On-sale of securities

ESOP trusts

ASX Listing Rules

Financial services licensing and securities hawking

Imposition of restrictions on shares

Corporate governance standards

Accounting standards

Directors' duties

The duty to act in good faith for the benefit of the company as a whole

Takeovers and the duty to issue shares for a proper purpose

Mixed purposes

Standing to challenge

Employee shareholders: Rights and remedies.

Capacity to call shareholder meetings and propose resolutions

Minority oppression

Challenging the validity of a variation of class rights

Key criticisms of the corporate regulatory framework for employee share schemes

Obstacles to employee share ownership in unlisted companies

Limitations of ASIC class order relief

The 5 per cent ceiling

Limitation of relief to full-time and part-time employees

4 The taxation law framework

Legislative history

Taxation of employee share schemes under Division 83A

The default tax position

Qualifying for concessions

Reduction concession

Deferral concession

Taxation treatment of employer

Other taxing provisions

Interaction with capital gains tax

Problems with the current tax regime

Stringency of requirements to access concessions in Division 83a

The 1000 tax exemption

Inflexibility

Cost and complexity

Potential for abuse

Position of cross-border employees under Division 83A

The current position

Issues for cross-border employees

Timing mismatch

Identification of relevant service

Characterisation issue-income or capital?

The position under Australia's tax treaties

Domestic relief from double taxation

5 Why do employers implement ESOPs and why do employees participate in them?

Employer objectives in listed companies

Respondents who did have an ESOP

Respondents who did not have an ESOP

Respondents who had abandoned an ESOP

Employer objectives in unlisted entities

Existing data on unlisted entities

Defining small business

Objectives

Employee motivations for participating in ESOPs

Methodology

Sample characteristics

Results

General attitudes towards ESOPs.

Employee share ownership patterns

Financial and control orientations to employee share ownership

Comparison of employee and government attitudes to ESOPs

6 An international comparison

The incidence of employee ownership in Australia, the United States and the United Kingdom

Australia

United Kingdom

United States

Taxation on receipt of securities where no concessions

Timing

General rule

Exception: Real risk of forfeiture

Exception: Eligible salary sacrifice arrangements

Valuation

Income or capital

Exception: Restricted securities

Exception: Options

Exception: Restricted stock

Exception: Publicly traded options

Exception: Non-publicly traded options

Tax concessions for employee schemes

Share incentive plans (SIPs)

Features

Eligibility and conditions

Save as you earn (SAYE) option schemes

Company share option plans (CSOPs)

Enterprise management incentives (EMIs)

Anti-avoidance

Employee stock ownership plan (US ESOPs)

Eligibility

Employee stock purchase plans (ESPPs)

Incentive stock options (ISOs)

Deductions for the employer

Regulatory requirements

Approval

Disclosure requirements

Reporting

Annual reporting requirements

Disclosure requirements.

Annual reporting requirements

Key differences between the three countries

Taxing point for shares

Taxing point for options

Valuation issues

Concessions including quantum and conditions

Small business concessions

Capital gains tax treatment on disposal

7 Conclusions and recommendations

Political support for ESOPs

Identification of policy rationales

Lack of data

Impact of regulatory regimes

Recommendations

Index.

Notes:

Description based on print version record.

ISBN:

9780522864106

0522864104