Incentivising senior staff with non-cash benefits in difficult times
When cash is king and businesses are focusing on making sure they have sufficient resources to trade, the payment of cash bonuses may be the last thing a business wants to contemplate. Business will need to retain the key staff in the business for the future and so it is vital to keep motivation levels as high as possible even at times of difficulty.
One route to consider is incentivising key staff through a share incentive scheme. The most popular scheme is an Enterprise Management Incentive (EMI) share option scheme. EMI enables the grant of options for qualifying employees to acquire shares in the future based on performance criteria. Initially there is no cash outlay for the company or the employee apart from the cost of implementing the scheme.
The most common type of EMI is an exit based scheme where the employees can only buy shares in the event of a future sale. That is not the only way to use the EMI scheme but this may help to lock in the key employees for the future recovery of the business, and also reflect the effort they have put in without costing the company any cash.