Share Based Reward

Share schemes, linked to appropriate performance-related targets, allow meaningful rewards to be delivered to employees contingent on the future success of the business.

Topical issues

• September 2011 - The rise of performance-based equity: 2011 GEIS executive summary available now
  

  PwC is delighted to announce the release of the "The rise of performance-based equity" executive summary. This report provides key insights from the PwC 2011 global equity incentives survey (GEIS), the seventh in the survey series.

  The 2011 survey covers new topics reflecting general trends in the mix of equity awards, in the relationship between companies and stakeholders, in administration of equity compensation, and in changes in the global use of equity based on tax compliance. Equity compensation retains its role as the key compensation component driving executives to create sustainable, long-term shareholder value creation, regardless of business, financial or capital markets turbulence.

  Click here to read the 2011 Global Equity Incentives Survey Executive Summary.

  

   

• August 2011 - PwC share scheme update - PRSI changes announced 23 August 2011
• June 2011 - 2010/2011 Global Equity Incentives Survey Webinar - 29 June 2011
  

  We are pleased to share key insights from PwC’s 2010/2011Global Equity Incentives Survey. Our survey is one of the most comprehensive studies available on the design and administration of equity incentive compensation plans for multinational companies. This year the survey also tackled more strategic issues facing companies to provide greater insight into trends in the marketplace.

  The webinar will be hosted by the PwC US firm. For details on how to register for this free event, click here.

  

   

• June 2011 - PwC share scheme update - 1 June 2011
• May 2011 - Reversal of employer PRSI on share based remuneration
  

  As part of the Jobs Initiative announcement on 10 May 2011, the Irish Minister for Finance has confirmed a reversal of the social security (PRSI) charge for employers which was to apply to share based remuneration from 1 January 2011. We have been making representations to the Department of Finance on this point in recent weeks that the new charge was significantly increasing the cost of doing business in Ireland and that it was not sustainable in the current climate. It appears these arguments were noted and the result today will undoubtedly be warmly welcomed by many companies who were facing PRSI exposures on share plan commitments to staff.

  It appears that the 4% employee PRSI charge will remain but it is assumed that this will only apply to share awards which are not evidenced by a written agreement predating 1 January 2011. The Finance (No.2) Bill and Social Welfare Bills due for publication in the coming weeks will provide greater clarity on this change.

  We will continue to update this webpage as more information is made available regarding any related measures.

  

   

• April 2011 - PwC share scheme update: Impact on employers & employees
• March 2011 - Gearóid Deegan: PwC presentation to IPSA on 2011 tax changes impacting share plans
• View earlier updates.

• Employee Share Plans

  Many Irish companies offer share awards which qualify for favourable tax treatment. This can have a significant impact on participation levels and further benefit employers, in terms of reduced social security costs. The greatest challenges for companies include:

  • obtaining shareholder approval
  • the Revenue approval process
  • managing payroll costs
  • maximising value for money through appropriate performance measures
  • keeping up with market best practice

  At PwC, we have many years experience assisting companies on all aspects involved in introducing and maintaining approved plans.

  The following briefing papers may be of interest.

  • Approved Profit Sharing Scheme
  • Approved Savings Related (SAYE) Share Option Scheme

  

   

• Executive Share Plans

  There is a broad range of share plans available to companies and the choice of executive share scheme will be influenced by a number of factors, such as:

  • consistency with corporate goals
  • convincing existing shareholders and institutional investors
  • motivating participants to achieve results
  • effectively communicating the key features to participants
  • tax effectiveness, and
  • accounting treatment.

  We advise on all aspects of executive share plans from design right through to implementation, employee communications and ongoing administration.

  

   

• Irish Tax Filing Requirements for Companies

  In recent years, the Irish Revenue have introduced more onerous reporting requirements for companies who offer share based awards. In general, a 31 March deadline will now apply to most schemes. Companies need to ensure that:

  • timely returns are made to avoid new penalties
  • procedures are in place to gather data before the deadline, and
  • employee participants are aware of tax payment and filing obligations

  At PwC, we assist organisations in managing these processes. We prepare the relevant tax returns for the various schemes based on the information provided by the company and arrange submission of those returns to Revenue.

  Click on the dates below for information on the returns required by these deadlines.

  • 31 March
  • 31 October
  • Variable (30 days upon receiving notification)

  

   

• Global Equity Incentives Surveys
  • 2011 Global equity incentives survey: The rise of performance-based equity (Executive summary)
  • 2009 Global equity incentive survey (Full report)
    2009 Global equity incentive survey (Executive summary)

  

   

• UK Share Plans

  Many Irish organisations have UK operations and need to structure share plans to be effective in both Ireland and the UK. The most important areas to consider in these scenarios tend to be:

  • tax effectiveness in the UK and comparable tax efficiencies in Ireland
  • UK PAYE and NIC withholding rules, and
  • UK tax reporting requirements

  We work closely with PwC UK to assist companies implement cross-border share plans.

  

   

• Global Share Plans
  • Recent legislative updates: January 2012 edition
  • Recent legislative updates: December 2011 edition
  • Recent legislative updates: November 2011 edition

  

• How we can support you

  At PwC, we are actively involved in advising companies on bespoke reward strategies including equity components. We leverage off the experience of an established network of specialists across the world. We provide ongoing consulting and compliance services to a wide range of Irish-owned and multinational companies on all aspects of equity based reward. We are also represented at Council level within the Irish ProShare Association (IPSA), the leading body in Ireland representing the interests of employers who offer share based incentives to staff.