Share incentives

Introduction to employee share ownership schemes

Employee share ownership typically happens in one of the following scenarios:

1. •

   business succession or ownership succession—private owners, such as an entrepreneur or family business, decide to sell all (more usually, part) of their shareholdings to their workforce

2. •

   insolvency or closure threat—employee buyouts can prove an effective route to recovery for businesses that might otherwise fail

3. •

   independence—companies may decide that a significant and even majority employee stakeholding will demonstrate and help protect the company's independence

4. •

   privatisation—the privatisation of various companies have provided occasional opportunities for employee buyouts, and

5. •

   owner vision—as in the case of John Lewis, Arup Group or Scott Bader, at the outset of the business or later on, the founder of a business opts for employee ownership

There are many ways in which share ownership schemes