With legal, tax and communication experts operating in tandem, we help create holistic and robust remuneration packages for all levels of employees. The packages, particularly for senior management teams but increasingly more broadly, often include longer-term incentive plans that drive employee and company performance. The design of such packages will consider cost and tax efficiencies and ensure tax and reputational risk compliance is upheld in all jurisdictions in which a business might operate. When implemented effectively, a remuneration package can incentivise the right behaviours, drive performance, cut costs and catalyse growth.
To develop these long-term schemes, the reward team work closely with businesses to paint a vivid picture of all employees within an organisation. They can then advise on plans that drive employee engagement and encourage autonomy across the board. Strategies, such as providing share options or growth shares to employees, are a way for employers to amplify engagement by rewarding performance and also allowing employees a seat at the table, playing an active role in driving the business forward.
Businesses are also adopting new methods to better personalise their employee offerings. One such method is a ‘cafeteria plan’ that allows employees more choice in selecting their benefits. It has also become increasingly important for businesses to introduce reward schemes designed to cultivate long-term employee loyalty and engagement.
A considered approach to paying and incentivising staff has never been more important.
In this context, we’ve seen Employee Ownership Trusts (EOTs) emerge as a popular model in recent years to incentivise a broader employee population while doubling as a tax-efficient exit strategy for business owners.
EOTs can be an attractive means to facilitate efficient and sustainable succession plans by giving employees a meaningful stake in the organisation. Therefore, they become a popular way to improve staff retention. By giving employees a stake in the company and aligning their personal goals with business success, this ownership model has the potential to increase employee engagement.
In the longer term, in addition to retaining and attracting staff, individual and family business owners will consider how changes to inheritance tax (IHT) and Business Property Relief could impact their exit or succession plans.
Those who would have ordinarily passed down ownership from one generation to another have to reconsider whether this is still the right strategy in the absence of an IHT relief that would allow the transfer of ownership to a family member without the need to fund any IHT charges. Without this IHT relief, many business owners are considering their estate planning and/or selling all or part of the business to a third party during their lifetimes to help ensure their estates have sufficient cash to meet any IHT costs.
Private equity partners are one such party. Private equity ownership remains an attractive exit strategy for businesses, and KPMG’s UK Private Equity Review revealed that private equity investments are on the rise. 203 private equity deals completed in the North West in 2024, compared to 165 in 2023.
