NeatHouse Partners
Hurdle Shares
There are many advantages to offer hurdle shares. Learn what they are, the benefits of them, and how we can help you offer these at your business.
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What are hurdle shares?
Hurdle share plans might be the right answer for your business if you are fast-growing and want to preserve cash and reward your hard-working talent. What they are is an incentive to get top-performing employees to continue to work hard and stay motivated to increase the company’s value.
Typically, private limited companies that are growing rapidly and who have founders exiting in the future use these. An employee will pay market value for the share if they want to participate. If and when the company grows past the “hurdle” or pre-set amount, will those participating benefit from it.
Why hurdle shares?
Hurdler shares are important because they allow you to reward your employees and keep them motivated to be productive and work hard.
Employees would become immediate shareholders. Essentially, they are an opportunity for staff to own an equity share in the company. They’re important and valuable since they benefit not only the employee but you and the company as well.
How Hurdle Shares Can Benefit Your Business
There are many ways in which hurdle shares can benefit your business that you should know about and be aware of. For starters, it’s going to help you attract and keep top talent and, in turn, ensure you stay ahead of the competition. It’s a well-known fact that incentive plans such as this can help your business become more productive and profitable, hence outshining your competitors.
There’s no annual reporting involved, and they are tax-efficient and offer tax-efficient rewards, so overall, they will save you time and money. There are no required ongoing admin duties either.
Furthermore, hurdle shares offer more cash-efficient rewards, and they’ll ensure that existing stakeholders are protected. Essentially, you can successfully reward loyal and top talent without having to increase their salaries. You can effectively reward your employees while holding onto your cash and investing it in your business. The hurdle will need to be met for the hurdle shareholders to benefit, which means your own shares aren’t diluted.
Next Steps
At Neathouse Partners, we want to work with you to help you best navigate HR, Employment Law, and Health and Safety Matters across the UK. We work with you to deal with and overcome the challenges you’re facing in any one of these areas of your business. Most importantly, we can assist you with offering hurdles shares at your company and ensuring that it’s a smooth and painless process.
Get in touch today to get the conversation started and have your questions answered by our expert staff.