GEO INSIGHTS

More than 22,000 Tesco employees are set to share a £134 million payout through the company’s Save as You Earn (SAYE) share scheme, driven by strong recent growth in Tesco’s share price. Colleagues who invested the maximum amount could earn profits of up to £42,576, while average participants are expected to make between £5,346 and £8,004 depending on the scheme term. The payout highlights the value of employee share ownership as part of Tesco’s broader benefits package for its 300,000 UK staff.

Employee share schemes are a flexible way for businesses to attract, retain, and motivate employees by offering ownership opportunities that can also provide significant tax advantages. UK-approved schemes such as Enterprise Management Incentives and Company Share Option Plans are particularly attractive, while alternatives like growth shares, direct share acquisitions, and Employee Ownership Trusts offer additional options depending on company size, structure, and goals. Choosing the right scheme requires careful planning around tax rules, valuation, eligibility limits, and long-term business objectives to maximize benefits for both employers and employees.

Is a 4-year vesting schedule still standard? At private companies, yes. But public company grant durations have declined steadily since 2020.

Employee share schemes are becoming increasingly popular as companies use equity to attract, retain, and motivate talent, but their success depends heavily on clear communication, realistic expectations, and ongoing engagement rather than just setting them up. Many leaders hesitate due to concerns about valuation, dilution, administration, and employee misunderstandings, highlighting the need for strong foundations and balanced cash-versus-equity compensation strategies. The article emphasizes that the real value of equity comes from effective communication, perceived fairness, and providing credible liquidity options so employees can actually realize the benefits over time.

How ESOPs Address the Threat of Business Succession in American Manufacturing

The state of play with SAYE for 2026.

Tune Talk Sdn Bhd is establishing an Employee Share Trust Scheme (ESTS) ahead of its planned IPO, with CEO Gurtaj Singh Padda transferring 4.15% of the company’s shares into a trust for employees. The ESTS is designed to allow employees to benefit financially from the company’s growth, including dividend distributions and performance-based rewards, and will facilitate share allocation under an employee share option scheme upon IPO. Tune Talk, a prepaid mobile service provider targeting lower- to middle-income users, reported FY2024 net profit of RM30.39 million on RM434.17 million revenue, with retained earnings of RM60.19 million.

Employee Stock Ownership Plans and other forms of equity compensation have become essential tools for attracting, retaining, and aligning top talent. Once limited to senior executives, these programs are now widely used across job levels and geographies, reflecting a broader shift toward long-term incentives and ownership driven culture.

But for all the attention paid to plan design, grant size, and vesting schedules, a critical part of the employee experience often goes unnoticed: dividend income, and more specifically, how much of it is silently lost to Dividend Withholding Tax (DWT).

In this whitepaper, you’ll explore:
• What DWT is and why it’s often overlooked in ESOP administration
• How recovery works and what’s legally reclaimable
• The strategic upside of integrating DWT recovery into your total rewards model
• Practical implementation options that minimize administrative burden
• A powerful DWT reclaim impact study, demonstrating the scale of opportunity
 

CONTRIBUTED BY SPRINTAX DIVIDENDS

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The Swiss Federal Tax Administration (SFTA) has updated its practice to align with a November 2024 Federal Supreme Court ruling clarifying that shares granted to employees for free under employee participation plans are not subject to Swiss securities transfer tax. The decision resolves longstanding ambiguity by distinguishing formalistic stamp duty rules from economic value, confirming that employee remuneration through shares does not constitute a commercial transaction for tax purposes. This alignment provides legal certainty for companies operating employee share plans and clarifies the tax treatment of share allocations, benefiting stakeholders and restoring predictability.