Employee Stock Ownership Plans (ESOPs)

In the life of nearly every business, there comes a stage when the issue of employee ownership participation arises in order to incentivise managers and employees.

Building on our Tier 1 Corporate and M&A practice (2026) and Tier 2 Employment practice rankings in The Legal 500, we have extensive expertise in designing and implementing a wide range of employee participation programmes, share options, shadow options, call options combined with put options, employee shares, and preferential employee share structures for start-ups.

We have in-depth knowledge of the key issues typically arising in such arrangements, including Good Leaver and Bad Leaver provisions, determining option exercise prices by reference to company valuations, complex provisions governing exit events and the interplay with non-compete and other key provisions.

Beyond the structures commonly used in the market, we have developed and implemented for numerous clients an innovative structure that meets important requirements such as the following:

• it does not interfere with a future exit process or subsequent investment rounds in the company
• it prevents the relevant shares from being transferred to third parties outside the participating employee group
• it secures the majority owner’s ability to safely repurchase the shares at a later date
• it incorporates non-compete provisions that may be absent from the relevant employment agreements.

In the course of the implementation, we provide services integrated with our long term tax advisory partner, with a great deal of experience in these structures.

Our services

• presenting the possible alternatives of employee stock ownership and assisting clients in selecting the most appropriate structure
• designing and implementing complex option schemes for employees and executives
• establishing MRPs and preparing the related documentation
• addressing non-compete obligations within the employee stock ownership plan
• designing and administering tailor-made employee stock ownership structures.