IPOs and Share Schemes 23 September 2014 Webinar David Pett and Stephen Woodhouse Pett Franklin AND
Paul Stoddart Computershare www.pettfranklin.com
...
IPOs and Share Schemes 23 September 2014 Webinar David Pett and Stephen Woodhouse Pett Franklin AND
Paul Stoddart Computershare www.pettfranklin.com
www.computershare.com
Today’s Webinar • Introduction Pre IPO • Owner tax position • Impact on existing plans • Planning for the transition • Administrator role and experience Post IPO • Impact of listing and listed company requirements
Note: If you have any questions, please submit these into the question box as we aim to deal with them at the end.
Existing share plans • Will awards vest or options become exercisable? • Will HMRC approved plans lose tax advantages? • Are lock-in/holding requirements for shares planned? • Dry tax charges?
Existing share plans • Dry tax charges – 45% top tax rate + 2% NICs – Transfer of employer NICs to employee can lead to effective tax rate of over 50% – Interaction with retention requirements
Pre-IPO share plans • What is the plan trying to achieve? – Should employees receive some of the uplift in value on the IPO? – receive historic value from before the IPO? – or only take part in the growth in share value afterwards?
Timing of pre-IPO awards • When does a share become a “readily convertible asset” (subject to PAYE and NICs)? – Are “trading arrangements” likely to come into existence?
• Valuation issues – When does increase in value because of potential flotation become reflected in price?
Some ideas • ‘Exit only’ awards made in advance but conditional on successful IPO – Disguised remuneration: exclusion from earmarking charge for exit-only deferred share awards (s.554K)
• Company makes £10,000 interest-free loan to each exec director to subscribe for shares at preIPO value – If close company, director must have