Staff incentive schemes other than ESOP

searcher profile

October 20, 2021

by a searcher from Charles Sturt University in Sydney NSW, Australia

Hi, Keen to hear from people that have incorporated an incentive scheme for staff other than the traditional ESOP or commission style rewards. Also, like to know how successful they've been and did they achieve your objective of keeping your key staff aligned and committed? Thanks in advance.

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commentor profile
Reply by an investor
from Harvard University in New York, NY, USA
Hi. Your headline is an extremely important one. ESOPs destroy equity value by making the exit from an investment more difficult, increasing expense and reducing the pool of interested buyers in a business. AVOID ESOPS.

A partial list of alternative incentive programs include:

- Stock options

- Appreciation rights

- Exit bonuses

- Multi-year payout bonuses

- Restricted stock grants



The choice of tools has to do with the unique legal, corporate and tax situation of your business, as well as your incentive plan goals. The principal decision factor besides structure: what level of employee and what metric qualifies one for equity-like incentives? So few people understand the equity when given and would actually rather have cash. Use equity with those who value it, pay cash to everyone else.
commentor profile
Reply by a lender
from Clemson University in Reston, VA, USA
I have clients that do an all expenses paid trip based on different metrics, they use their points from the company credit cards to do it. I have other clients that do company trips to beaches and fun destinations and give them cash for fun activities. Credit card points pay for a lot and it’s not taxed which is beneficial for both company and employees.
commentor profile
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