For listed and private companies in the UK, having numerous employee shareholders can be overly burdensome to administer. Whether the problem is administrative or surrounds an employee leaving employment, opting for an Employee Nominee can overcome these obstacles.
What is an Employee Nominee?
The introduction of an Employee Nominee allows share plan participants to hold their shares post maturity/release as an alternative to holding those shares in their own name. This means that they can continue to receive dividend payments, reinvestment options and annual reports whilst retaining the opportunity to vote at the Company's meetings.
The nominee is also used to facilitate the holding of shares for participants whom are subject to a restriction or post-vesting holding period.
Benefits of an employee nominee service
- Removes requirement for paper share certificates.
- Restrictions can be monitored and shares released as and when required.
- Regular statements are issued or visibility via online portal.
- Increased privacy as shareholder details are taken off the public share register.
- Participants continue to receive dividend and voting rights.
- Faster dealing rates and quicker settlement.
- Simplified vesting/maturity process for the company and employees.
Recent guidance from the Investment Association recommends the use of a nominee to 'hold' shares received by an employee following participation in a company share plan. These plans are typically discretionary and allow malus and clawback provisions to be enforced post-vesting; in addition to a receipt of the shares should the employee's entitlement to the award be withdrawn.
Implementing a nominee
Ocorian have been administering employee incentive structures for over 15 years and has a wealth of experience in running nominees for employees of both private and listed companies.
With a dedicated team of professionals and a demonstrable track record in administering Employee Trusts, we can assist in the planning and implementation of nominees using our experienced team of professionals and sophisticated IT infrastructure to support administration and employee visibility.
Please get in touch with one of our team below if you have any questions regarding company sponsored employee nominees or wish to explore how Ocorian can assist you with their implementation. You can find out more about our Employee Benefit services here.