Long term incentives


Share incentive schemes are probably the most complex and specialised area in a company’s reward design and administration.  CT offers a fully integrated outsourced service dealing with all share-scheme related administrative activities.  What makes CT’s offer unique is that we do not believe in a “one size fits all” approach.  Our administrative service offering is flexible and allows you to decide where you require our involvement.

Long term incentives

CT is able to administer all types of share based incentive schemes.  We employ a dedicated professional team that interacts directly with the participants of the various schemes that we administer.  We adopted a typical “spoon-feeding” approach which is aimed at ensuring that the value of the share incentive scheme is unleashed for both the Company as well as the participants.

SCHEME DEVELOPMENT & SCHEME STRUCTURE

 

Help with the design of a new scheme taking into account:

  • the Remuneration philosophy of the Company;
  • Scheme’s share allocation
  • Market trends
  • Settlement methods
  • Sustainability of the Scheme
  • Legislation
    • Securities Services Act
    • Companies Act
    • Income Tax Act
  • JSE listing requirements.

Help to compile:

  • Trust Deed
  • Scheme policy
  • Scheme rules
  • Practical arrangements

 

Various stakeholders, including the Board of the Company should approve the scheme.  We have experience in presenting scheme structures to Company Boards and Committees

TRANSACTIONS

 

  • Ensure requests are in line with Scheme rules
  • Constant communication with participant with regards to the transaction’ status
  • Transactions to be done at more favorable
  • brokerage fee
  • Delivering of shares in time
  • Release shares to participant’s personal CSDP
  • Obtain tax directive from SARS
  • Calculation of proceeds
  • Inform participant of outcome of transaction by means of a letter
  • Sens announcement (where applicable)
  • Direct payment into participant’s bank account
    within     7 days
  • Ensure the participant’s IRP5 is updated
  • Update Scheme books
  • Individual CGT calculations

MAKE AN OFFER

  • Calculate offers to ensure Market compatibility and support the remuneration strategy
  • Compile scheme rule booklet in “easy understandable” language.  There is no sense in having a Share Incentive Scheme off which the participants do not understand
  • Compile and send offer letter
  • Sens announcement (where applicable)
  • Information sessions/road shows to explain to participants the detail of the scheme (Training to participants)
  • Follow up on outstanding answers
  • Send confirmation certificate on acceptance of offer

COMMUNICATION AND EDUCATION 

  • Do all communication to participants on behalf of the Company/Trust.  We aim to become part of your company although, from the participant’s view, it will always appear as if your company is in direct communication with him/her.  To this end, all communication will first be signed off by your company’s responsible official before distribution.  This includes communication resulting from staff movements, market tendencies, share portfolios and other important information.
  • Regular portfolio statements to participants
  • Participant education and training
  • All participant enquiries

RECONCILIATIONS & REPORTING 

  • Monthly reconciliation of all relevant accounts
  • Monitoring of Scheme’s approved share capital
  • Scheme’s financial books:

Accounting:  Trust

Manage Trust’ Bank account

Management of participant payment

Trust’ annual financial reporting

Monthly management reports

IRP5 update

 

We have extensive experience in the design of share incentive schemes and will carefully take your business’s remuneration philosophy, share allocation, market trends, settlement methods, sustainability of the scheme, legislation and JSE listing requirements into account.

We effectively administer the offer, vesting, transaction and payment processes.  All transactions result in the employee paying Employees Tax or Capital Gains Tax.  We advise the Company’s payroll specialists on updates to be made with regards to the IRP5.  We also have specialists available to help the participants with their tax returns including Capital Gains Tax calculations.

Share incentive schemes foster ownership and are an integral part of a company’s employee value proposition. These schemes are a cornerstone of attraction and retention strategies.  We believe that only when a participant understands the scheme, the scheme can have value to the participant and consequently to the Company.  We consequently ensure that all scheme participants are thoroughly trained in the scheme rules and that they possess an updated simplified share scheme manual.  We also continuously consult and advise participants on managing their scheme portfolio within the scheme rules.

We can, without infringing on the relationship between the company and the employee, take care of all share scheme related communication on behalf of your company.  This ensures that your share incentive scheme participant always perceive that your company is communicating directly with him/her without any third party intervention. 

We are most proud of our unique administration system.  With this system participants can view their scheme portfolio, request transactions and monitor transaction status online.  The system also has unique “what if” calculators which the participant can use to determine the outcome of transactions before formally requesting it.  The system only uses previously approved letter templates.  The system has an e-mail feature which is used to communicate anything to the participant.  The system is linked to financial books of the company by means of various in-depth reports.  This also enables us to monitor the scheme’s approved share capital.  We can assure you:  If it is in the system, we can report on it!

A good relationship with our client (and its Auditors) is what we thrive on.  You are guaranteed a quick turnaround time and value-adding support to maximize employee satisfaction.

In short:

We offer the Company the total administration of its Share Scheme, leaving it with more time and energy to focus on its core business.

 

We offer the participants a professional once-stop service, giving them peace of mind - helping the Company to reach its goals.