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You risk losing key people if you don’t have a method to lock them in – we recommend using equity.

Employee Ownership

You risk losing key people if you don’t have a method to lock them in – we recommend using equity.

By , October 23, 2023

As a business owner, you know how important it is to retain your top talent. Losing key employees can be costly, both in terms of productivity and revenue. That’s why it’s essential to have a method to lock them in and keep them motivated and committed to your company’s success. One of the most effective ways to do this is by offering equity.

Equity is a form of ownership in a company. When you offer equity to your key employees, you give them a stake in the company’s success. This can be a powerful tool for motivating and retaining your top talent. Equity can also help align your employees’ interests with the company’s goals, leading to better performance and increased productivity.

The benefits of offering equity to your employees are clear, but how exactly does it work? There are several ways to structure equity compensation, but the most common is through Employee Share Ownership Plans, which give employees the right to buy a certain number of shares of company shares at a set price, usually lower than the current market value. This allows employees to benefit from the company’s growth and success.

Offering equity isn’t just beneficial for your employees. It can also be a smart business move for you. By giving your key employees a stake in the company, you’re investing in their loyalty and commitment. This can reduce turnover and the costs associated with hiring and training new employees. Additionally, equity compensation can be tax-deductible for your business.

In conclusion, offering equity is a smart move if you want to retain your top talent and keep them motivated and committed to your company’s success. It aligns your employees’ interests with the company’s goals, increases productivity, reduces turnover, and can be a tax-deductible expense for your business. So don’t risk losing your key people – consider implementing an equity compensation plan today.

Craig West

Craig West

Executive Chairman | Succession Plus

Craig West is a strategic accountant with over 20 years of experience advising business owners. His background as a CPA in public practice has provided invaluable experience in the key issues of concern to business owners.

In March 2014, Craig was appointed Executive Chairman of the SME Association of Australia, Australia’s largest small business organisation representing over 300,000 business owners.

In October 2014, he was awarded the Exit Planner of the Year at the Exit Planning Institute Annual Conference in Texas, USA, due to his innovative development of an exit planning process to help business owners maximise business value and achieve a successful exit.

Craig’s proprietary structure - a Peak Performance Trust - has won the Australia-wide award for the Employee Share Ownership Plan of the year twice in four years.

In November 2018, Craig launched SME Experts in partnership with Mark Bouris’ Mentored on Podcast One and quickly grew the monthly podcast audience to over 26,500 downloads; in October 2019, he released a new podcast focused on medium-sized businesses - Mid-Market Matters.

In July 2021, Craig joined the NSW Committee for STEP (Society of Trust & Estate Practitioners) – focusing on advising families across generations.

Craig has also launched a SaaS platform, Capitaliz (which captures the 21-step process), to assist other advisers internationally deliver advisory services at scale.

In November 2021, Craig was appointed Executive Chairman of NSW Leaders, a business mentoring group for leading NSW businesses.

In July 2022, Craig West received the award of Doctor of Business Administration for his research thesis titled “Examination of the key factors driving business exit options in Australian Small and Medium Enterprises.”

Craig is passionate about encouraging business owners to think strategically, maximise the value of their business and achieve a successful exit.

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