Ask Timpo: Share options – where do I draw the line?
Q: I’m considering share options for my staff, but where do I draw the line? Should I offer share options to directors/senior staff only, or to all employees?
A: I wouldn’t bother with share options.
If you want to motivate and reward your colleagues, pay them a big bonus based on profits.
If, however, you’re bent on the share-options route, start giving them to your senior managers and only spread the scheme company-wide when you know it works.
I know the theory: share schemes are meant to give colleagues a real sense of ownership, with the chance of a capital gain if the company grows. Sometimes, it all works out well, and you do hear of some employees hitting the jackpot. But I have good reasons for keeping hold of the shares.
We’re a wholly-owned family business and I want to keep it that way for a long time to come. With no plan to sell, the big share payout is unlikely to happen.
Besides, I don’t want any more shareholders. Right now, we have no need for a complicated annual report, or shareholders voting at an annual meeting. No-one tells the directors what to do, and it works well that way!
You clearly have a different view – I just hope you’re handing out shares because it’s right for the business and not because you think it’s the “right thing to do”.
John Timpson runs high-street cobbler Timpson, which has 800 branches nationwide and sales of £150m. Got a question for him? Post it in the comments box below.