[sundove]

... with equity

Recently a member of staff approached me with a request. She is a loyal and valued staff member who has worked for the company for nearly 4 years. The business has been running for nearly 6 years and is owned by my self and 1 other director with the shareholding being split evenly down the middle 50-50

Neither myself of my fellow director are completely adverse to this. As I said she is an invaluable member of the team who would be very difficult to replace. However I am unsure as to what level of shareholding is suitable.

I realize this is something of a 'how long is a piece of string' question but I'd welcome any guidance folks could offer. I'm nervous that this could cause complications at a later date. A third party within the board/owners of the company means disagreements are more likely, and I'm not 100% clear on how this would work in terms of the salary and future dividends.

Rewarding loyal members of staff is the right thing to do, but were talking about the handing over a proportion of something - I've poured a significant personal investment and all of my time over the last 6 years into - essentially for free. And to be frank, this doesn't sit comfortably with me.

From a technical standpoint, I appreciate the deal could be structured so the individual would have no voting rights, and the shares could be held in their name only for the purpose of conversion to capital in the future should the company be sold. However I'd welcome any other folks thoughts on this and if any one has had similar experiences what pitfalls should my fellow director and I be aware of.

[Indizine]

Why do you have to consider it at all? If it doesn't appeal and you have your worries, then look at another reward scheme. You are right to doubt giving away a portion of your hard earned business just because a member of staff asked. So I would ask, what is in it for you? And would she leave if you don't offer her a share?

[RedEvo]

It's always been my intention to offer equity in Red Evo. Haven't got their yet but we will. I think done right it's a potentially good move and means key people will have more skin in the game.

d

[slyle]

It is a difficult decision with the economic climate now there maybe less chance of this invaluable member of staff doing a runner. However, if you feel she really deserves a share, but you are not keen,you could make it a small one.