| Commentary

52.2 Flowering shares

| Commentary

52.2 Flowering shares

The term ‘flowering shares’ or sometimes ‘blossoming shares’ usually denotes shares with rights attached to them which will increase if certain performance targets are met by a particular deadline. (The terms are not used consistently and are sometimes synonymous.) For instance, managers are issued with shares carrying initially the right to a 15% stake in the company. If certain performance targets are achieved, this increases to 25%. If the drafting is correct, the managers will be given full beneficial ownership in the flowering shares. Consequently, the increase in value of the shares cannot really count as the

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