Planning for Employee Share Ownership in Your Canadian Company

Incorporating employee share ownership plans into your company can be a great way to increase productivity and employee cohesiveness. Employees with a stake in the company will feel that they truly have something to work for, and will likely be more willing to entertain the ideas of management, and carry through demonstrated success tactics on a regular basis. Here are some steps to take when you are planning to implement an employee share ownership program into your company.

Determine what the percentage of matched contributions your company will make. This step is critical when it comes to encouraging employee share programs. Some companies will start as low as 5-10% on the match, while some will go up to 50%. The company has to make the offer appealing to employees beyond just the basement prices, and matching dollars is a good way to do this.

Determine a timeline. The company will want to set some limits on just which employees can have shares, and how many can be retained. You should have an employment timeline in place, with new employees ineligible to buy stock until a certain amount of time has passed with them in the employ of the company. There should also be a date agreed when the company offers the matching amount on the employee’s contribution; this will usually be at the end of the year.

Plan an informational session with employees. This is best done in a group setting, where questions can be asked freely. Make sure the presentation is very clear, so that employees will understand the benefits the program offers. Doing informal one on one sessions often leads to feelings of nervousness on the part of some employees, as they wonder if the program is going to be by invitation only, or if they’re getting the same deal as the next guy. Stress is the inevitable result.

More and more companies are taking advantage of the cooperative environment that employee share ownership brings about. It is an idea that is just beginning to break through in Canada, and the best way to implement the plan is through the services of professional accountants, stock experts, and human resources personnel.

For more information on this article or to learn about an ESOP rule, visit ESOPBuilders.com

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Planning for Employee Share Ownership in Your Canadian Company
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