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GRG General Employee Equity Plans

GRG General Employee Equity Plans2018-11-27T15:12:15+10:00

A great way to attract, retain and motivate all employees

General employee equity plans (GEEPs, also called general employee share plans or general employee share schemes) are ideal to align the interests of the employees with those of shareholders. Moreover, and because employees can benefit financially when the company performs well, GEEPs help build the foundation for enhanced employee engagement, commitment and involvement. GRG’s GEEP advantages include:

  • Tax-effective savings for participants,
  • Wealth creation as an uncapped supplement to superannuation (with access available prior to retirement), and
  • Improve a company’s financial position in two respects: the balance sheet (short term) and profit & loss (long term).

GEEPs can also be used as a NED Fee Sacrifice Plans to facilitate NED holdings, which is an emerging focus of scrutiny for governance groups.

GRG offers a comprehensive GEEP service

GRG has deep experience in developing GEEPs tailored to the specific circumstances and needs of individual ASX listed companies.  Our comprehensive solutions cover the complete GEEP lifecycle of providing plan design options and recommendations, obtaining board and shareholder approval, arranging plan documentation, implementation and communication, liaison with stakeholders (including proxy advisors and the Australian Shareholders Association) and plan administration.

The $1,000 tax exempt plan base level of GEEP remains to be inadequately low for most employees in terms of building significant ownership, participation and engagement. Hence, more flexible and tax-effective plans are needed. In response, GRG recently developed a new-style GEEP based on salary sacrifice with a guarantee to ensure that amounts sacrificed by employees come with a capital protection guarantee even if the share price falls. This feature is specifically introduced to remove the main impediment to employee acquisition of shares, (risk of loss). When combining it with regular affordable pre-tax savings via salary sacrifice, it makes this unique new style of GEEP the way to go for most ASX listed companies.  Lastly, the capital guarantee is provided at nil cost to the company.

How GRG’s GEEPs differ

  • GRG removed all major barriers to maximising employee ownership with no limits on amounts that can be sacrificed
  • Our instruments are effectively as flexible as cash, because:
    • They may be exercised at any time of the participant’s choosing, and
    • No tax has to be paid by participants until exercise or sale.
    • The instruments are designed to eliminate investment risk in that our default design includes a 100% capital protection guarantee of amounts sacrificed if the share price has fallen at the time of exercise.
  • No private tax rulings are required, as our plans are not based on loopholes or principles that are likely to come under scrutiny from the ATO – we only use commonly accepted approaches.

Recent GRG Remuneration Insights on this topic

  • The Missing Piece

    Despite the bulk of the day-to-day execution and monitoring that impact business results being done by middle management and lower level employees, most employee remuneration systems reward the short term…

  • ASX300 GEEP Market Practices

    As company size grows, use of GEEPs increases. In this Remuneration Insight we present the findings of our extended analysis of observed market practices in relation to general employee equity…

  • ASX100 GEEP Market Practices

    This Insight presents the findings of our extensive research related to the practices of the ASX100 companies, which may indicate the impact of the planned Commonwealth legislative changes on the…

  • $1,000 Tax Exempt Plan (TEP)

    This series of five GRG Remuneration Insights deals with General Employee Equity Plans (GEEPs) which are made available to most full-time Australian employees, and some part-time employees, and often operate…

  • After Tax Employee Contribution Plan (ATECP)

    This series of five GRG Remuneration Insights deals with General Employee Equity Plans (GEEPs) which are made available to most full-time Australian employees, and some part-time employees, and often operate…