Equity-based programs help employers attract, motivate and retain quality employees.
For most publicly-traded companies and some privately-held companies, an equity-based compensation program is an important part of the compensation program for key employees. Many publicly-traded employers expand such programs to a broad-based group of employees. For a start-up, an equity-based incentive compensation program is the key attraction for quality employees. The type of program and the extent of its coverage depends on the type of employer and its compensation philosophy and goals. Such programs include equity option plans, equity purchase plans, equity appreciation rights plans and restricted equity grants. Each type of program comes with its own set of tax and securities law consequences. Ice Miller's Employee Benefits Group assists clients in complying with all requirements applicable to such programs and in communicating the terms of the program to participants in a way that satisfies applicable requirements and provides a solid understanding of the program's benefits.
Some privately-held employees want to motivate key employees through something similar to an equity-based compensation program that does not result in the employee having equity in the employer. The Employee Benefits Group has helped such employers establish and implement a wide variety of synthetic equity programs, including cash-settled equity appreciation rights plans, performance unit plans and equity unit plans. We also assist employers in complying with the tax and other legal requirements applicable to each type of synthetic equity plan and in communicating the plan to participants.