STOCK OPTIONS

DELIVERY OF SHARES TO WORKERS

Accelerate your business with these expert tips "Stock Options. Delivering shares to workers". Analyse and discover this TIP!

Stock Options are a The right to purchase shares in a company at a price fixed in advance, granted to employees or managers of the company. The idea behind Stock Options is provide employees with an incentive to improve the company's performance and align their interests with those of shareholders. The employee can exercise the stock option within a specified period and at a specified price, known as the exercise price. If the share price rises, the employee can sell his shares at a higher price and make a profit. However, if the share price falls, the employee may lose money.

Stock Options are a popular form of compensation in startups, since, allows companies to offer incentives to their employees without having to spend cash. The startup law (see+) The Spanish government establishes tax advantages for the delivery of shares to company employees. These will be exempted when they are made free of charge or for less than the normal market price. 

The comparison between the different types of entities is shown here.

 As we can see, and although there are still aspects to be determined, the new law offers a very interesting tax treatment for entities that meet the requirements. It will therefore be important to keep up to date with future developments. In order to attract talent and provide a remuneration policy suited to the situation and needs of emerging companies and start-ups, Spain improves the taxation of remuneration formulas based on the delivery of shares or participations to the employees of these companies, known as "equity shares". stock options. Thus, the amount of the exemption is increased from 12,000 to 50,000 euros per year in the case of the delivery of shares or holdings to employees of emerging companies, and this exemption is also applicable when such delivery is the result of the exercise of purchase options previously granted to them. 

In addition, for the part of the income from work in kind that exceeds this amount, a special rule of temporary imputation is established, which allows its imputation to be deferred until the tax period in which certain circumstances occur, and in any case, within ten years of the delivery of the shares or holdings. Finally, a special rule is introduced for the valuation of income from work in kind, with the to clarify the value of shares or participations granted to employees of start-up companies.

Tips that an entrepreneur can follow to motivate employees with stock options:

1. Clearly explain the stock option plan: it is important that employees understand how stock options work, how much they are worth, how they can be exercised and how they are linked to the success of the company.
2. Offer fair participation: make sure that the number of shares you offer reflects the value and contribution of each employee to the company.
3. Fostering company culture: stock options are most effective when they are used to motivate employees to work together towards a common goal.
4. Regular monitoring and review: Keep your workers informed about the value of their stock options and follow up regularly to make sure everyone is motivated.
5. Offer additional incentives: stock options can be more effective if combined with other incentives, such as bonuses, additional holiday days, etc.

In general, it is important to keep in mind that stock options are a powerful tool to motivate workers, but they must be used strategically and fairly to get the best results.