Setting Up Employee Share Schemes.

Why Consider a Share Scheme

An employee share scheme can turn commitment into performance. It helps attract and retain key people, align them with your company’s success, and support long-term growth.

Whether you are a startup looking to reward early effort or an established business planning for succession, a well-structured share scheme can strengthen loyalty and build value for everyone involved.

We help businesses design share schemes that motivate staff, protect ownership, and achieve commercial goals with legal clarity and coordination with your tax adviser.

Types of Share Schemes

Employee share schemes can be designed in different ways depending on your goals and company structure. The main types include:

Bonus Share Plans

Employees receive shares as part of a performance or profit-based bonus. This rewards results and helps retain key people.

Share Option Plans

Employees are given the right to buy shares in the future at a set price, usually once certain milestones or time periods are met. This encourages long-term commitment and growth.

Phantom Share Schemes

Employees do not receive actual shares. Instead, they earn cash bonuses that reflect the value or growth of company shares. This creates similar motivation without changing ownership.

We help you choose the option that best fits your company’s goals, ownership model, and stage of growth.

Getting the Structure Right

A successful scheme balances reward, control, and compliance. We assist with:

• Drafting scheme rules and participation agreements

• Setting clear terms for eligibility, vesting, and exit

• Explaining governance and shareholding implications

• Advising on shareholder rights and company obligations

Our focus is to make the legal framework simple, fair, and aligned with your wider business plan.

Legal and Tax Compliance

Share schemes cross several areas of law. We work alongside your accountant or tax advisor to ensure your scheme meets company, employment, and tax requirements. This collaboration helps avoid unexpected liabilities and ensures the scheme works in practice as well as on paper.

Where We Work

Our commercial team is based in Wellington, Lower Hutt, and Masterton, and works with businesses across New Zealand to design and implement share schemes that are strategic, compliant, and built to last.

Questions We Often Get Asked About Share Schemes

What is the main benefit of an employee share scheme?

It links employee performance with company success, helping attract and retain skilled people while rewarding growth and commitment.

Do share schemes dilute existing ownership?

They can if new shares are issued. We explain the impact on ownership and help structure the scheme to balance incentive with control.

Are there tax implications for employers or employees?

Yes. Employee share schemes can have tax consequences depending on how they are structured. We do not give tax advice, but we work closely with your accountant or tax adviser to ensure the legal documents align with their tax planning advice and meet compliance requirements.

Can small or private companies offer share schemes?

Yes. Many privately owned businesses use share or phantom schemes to reward key staff without losing control of ownership.

Do I need a lawyer to set up a share scheme?

Yes. A lawyer ensures your scheme documents are valid, fair, and compliant with New Zealand law. Legal advice protects both your company and your participants.