Plan types

Basic Plan Read more Employees contribute after tax salary and wages to fund the acquisition of shares at market value Employees save brokerage on share purchases as this cost is met by the company. Employees have full exposure to share price movements. As a contribution plan it must comply with Corporations Act requirements, which can be particularly onerous for unlisted companies. Read more Global Employees Plan (GEP) Read more Same as a Basic Plan but with “matching” by the company as an employee incentive – mainly used by companies with employees in multiple overseas jurisdictions Used by companies that want all employees around the world to participate in the same plan. Not very attractive to Australian employees, and generally not optimised for any jurisdiction; it represents the lowest common denominator in ESOP design. As a contribution plan, it must comply with Corporations Act requirements in Australia. Read more The Share Save Plan™ Read more A salary sacrifice plan which may have a matching aspect Salary is sacrificed each pay period and applied to acquire Plan Shares which attract dividend equivalent entitlements that are [...]

Options where the exercise price is set at a significant premium to the share price at the time of grant

Like options but with a “cashless exercise” – net benefits for employees are identical to options with the same terms

Concessional loans are provided to employees to fund the purchase of shares at market value

A salary sacrifice plan which may have a matching aspect

Tax concessions for young, small companies only

Simulates an equity plan without the complexity of using actual shares

Salary sacrifice to acquire only shares – tax is deferred until share disposal restrictions cease to apply

Employee benefit is tax free but must comply with a series of conditions including full vesting at grant and a 3-year non-disposal period

No-risk, highly geared employee participation in share price growth but not dividends – but involves cost for companies