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Aims & Objectives

The certificate provides the essential background knowledge needed by anyone working in share schemes and employee ownership.

Learning outcomes

On the successful completion of this certificate, the student should be able to:

1. Discuss with an employer the likely costs and benefits of introducing an ESO scheme;
2. Explain to an employee what happens when a business offers employees the opportunity to join an ESO scheme; 
3. Critically review the development of ESO schemes in the UK; and
4. Contribute to understanding and promotion of the sector.

Synopsis of content

Unit 1: An introduction to the ownership of shares & the historical context of ESO schemes

• The market for shares, buying and selling, profits, prices and dividends
• Shareholder rights and meetings
• Historical background to employee share ownership (ESO) schemes in the UK
• Comparative references to the USA (Russell Long and Kelso)
• The role of Malcolm Hurlston CBE and The ESOP Centre

Unit 2: New initiatives

• The Nuttall review of employee ownership
• The new surge of governmental interest
• Shares for rights

Unit 3: Employee share trusts

• The nature of an employee share trust
• Why introduce a trust? The question of "direct versus indirect"
• Succession planning through an employee share trust
• Illustrative diagrams for the operation of the trust

Unit 4: Employee share schemes

• What schemes are available in the UK?
• The definitions and patterns of adoption of various ESO schemes

Unit 5: The legal framework part 1

• The statutory and regulatory framework
• Securities laws
• Financial services laws

Unit 6: The legal framework part 2

• The statutory and regulatory framework continued
• Employment laws
• The institutional investor guidelines

Unit 7: Models for Employee Ownership

• Case studies of successful ESO schemes
• Comparison between quoted companies and private companies
• Employees as owners and financial stakeholders
• Producer co-operatives partnerships (Mondragon, John Lewis)

Unit 8: The tax essentials

• Historical/political context to the significance of approved and unapproved tax regimes to ESO schemes
• Tax approval process
• Opportunities for start-up arrangements

Unit 9: The accounting essentials

• The accounting option expensing rules for ESO schemes
• Detailed examples of the accounting treatment
• The option pricing models

Unit 10: Building the business case & employee well-being

• Productivity, retention, incentives and rewards, corporate "glue"
• Meeting the needs of customers and markets
• Investment in human capital, employee relations and community relations
• Financial education in the workplace
• Potential links between pensions and employee share ownership

Unit 11: Statistical research & case studies

• Do ESOs work and who benefits? UK and US statistics
• Statistics and summarised reports and discussion
• HMRC research from recent years
• Practical case studies

Unit 12: Communications and employee engagement

• Stakeholder communication and administration issues
• Underwater options and share price volatility
• The role of the human resources department and other departments (payroll, finance, marketing and public relations)

Unit 13: The global economic context

• The place of employee share ownership in macro-economics
• The European dimension
• Future world developments

Unit 14: Administration

• Compliance
• Practical considerations
• Ongoing maintenance