Share schemes may be shelved after rule change

first_imgNew rules governing accounting for employee share options may lead to athird of listed companies considering abandoning their share options schemes. This is one of the key findings in the second annual survey of employee shareplans among UK companies, conducted by Capita Share Plan Services, AbbeyNational and Eversheds. The survey, of 138 quoted companies, shows that awareness of the recommendedchanges to accounting for share options – which will require companies to accountfor their employee share option awards in their profit and loss accounts – isvery high among employers. Nearly one-third of respondents say the changes will make it less likelythey will continue to offer share option plans in future. Yet, the survey suggests this is the only cloud on the horizon of employeeshare ownership. Despite plunging equity markets, the number of companiesoffering employee share plans remain strong, as do participation rates amongemployees. Justin Cooper, head of share plans at Capita, is confident that theimmediate outlook for share ownership schemes remains healthy, with 72 per centof companies in the FTSE 350 now offering a share incentive plan (SIP) orconsidering implementing one. There has also been a 60 per cent increase in the number of SIPs in placeover the last year. Cooper said: “Despite extreme market volatility, the employee shareownership ethos remains strong, with employers remaining enthusiastic about thepopular sharesave scheme, and interest in the SIP now growing steadily. “However, concerns over the likely impact of the proposed newaccounting standards are clearly gathering pace, and may well re-shape employeeshare ownership over the next few years,” he added. Share schemes may be shelved after rule changeOn 22 Apr 2003 in Personnel Today Previous Article Next Article Comments are closed. Related posts:No related photos.last_img read more