Employee Benefit Trusts are established by companies for a number of reasons but primarily they are established to reward, motivate and incentivise senior executives and employees.
In recent years the way in which senior executives and employees are remunerated has changed. There has been a trend for annual incentive programs to be linked more closely with specific corporate and business unit performance measures.
This has been achieved by introducing:
- long incentive plans
- share option plans
- employee share ownership plans
- deferred compensations plans.
Working with their accountants, HR and Tax advisors, each company will develop a plan tailored to their strategic objectives and corporate requirements. For this reason no two plans are ever the same. These plans are often managed through Employee Benefit Trusts.
This may include:
- granting awards/options
- vesting or exercising awards/options
- employee communication
- purchasing and warehousing shares.
Establishing an Employee Benefit Trust in a tax-neutral jurisdiction, such as Jersey, may create tax planning opportunities for companies and their employees.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.