Jonathan Fletcher Rogers
Jonathan Fletcher Rogers is head of employee incentives group at Addleshaw Goddard.
In what ways does employee share ownership serve a useful purpose?Simply being able to say to employees that they own part of the business is a very powerful message on its own. However, share ownership can have an even greater impact where it is used to maximise employee engagement. Research has shown how employee engagement can create a virtuous circle where positive attitudes flow through to employee behaviour and productivity, which can then be used to reinforce those attitudes. Employee share ownership, along with an effective communications strategy which ties in to the performance of the business, can reinforce all aspects of that virtuous circle.
How can we widen and deepen the adoption and use of employee share ownership?Continued research into the benefits of employee share ownership is vital in order to persuade businesses that it is worthwhile.
What would you tell someone on the fence about introducing employee share ownership to their company?Why wouldn’t they? There are many perceived obstacles to employee share ownership that can be overcome relatively easily. I would also encourage them to think about the cultural impact that employee share ownership could have on their business, and the benefits associated with this both in the short and long term. However, the most important factor in maximising those benefits is communication.
What do you think will change about employee share ownership over the next five years?Hopefully, employee share ownership will become even more widespread as companies react to the opportunities provided by recent legislative changes. In particular, the changes to tax advantaged share plans and the government’s promotion of the employee ownership model.We have already seen in the recent Budget the scaling back of tax benefits for employee shareholder status (ESS), so one would expect ESS will be abolished entirely at some point, once it is politically acceptable to do so.
What has been the most important development in employee share ownership during your career?The creation and continued promotion by various governments of EMI options has probably had the greatest impact across the largest number of companies. For smaller companies, EMI still provides the simplest and most tax efficient way of giving employees a stake in the business.
Which change to employee share plans legislation, in the UK or elsewhere, would you most like to see?It is disappointing that the government missed an opportunity to simplify the rules surrounding employee benefit trusts following the Office of Tax Simplification’s recommendations in 2013. EBTs can be a very useful tool for private companies looking to warehouse shares or provide an internal market. However, the complex tax rules in connection with the operation of EBTs deter many smaller companies. I often find myself struggling to explain to clients why they should be considering inheritance tax when operating a relatively straightforward EBT arrangement that is ultimately intended to put shares in the hands of employees. Any measures to simplify the tax treatment of EBTs, or to create a new shareholding vehicle as proposed by the OTS, would be very welcome.
Why do you think employee share ownership has enjoyed cross-party support in the UK?There are aspects of employee share ownership that fit in with the political ideals of both sides. On the left, it appeals to the idea of empowering the workforce and closing the gap between owners and employees. On the other hand, Conservatives see employee ownership as encouraging entrepreneurial spirit.
Which aspect of The Esop Centre do you most value?One of the advantages of the Esop centre is its broad base of members. The mix of companies, administrators, trustees and advisers means that there is always a wide range of views on the current issues affecting employee share ownership.
Who would be the guest of honour at your fantasy dinner party?Eric Cantona (together with Sir Alex Ferguson if I was allowed a second guest)
Which book has most changed your life?Consider Phlebas by Iain M BanksWhat is your favourite quotation and why?“The more I practice the luckier I get” – Gary Player. What you get out of life invariably depends on what you put in
What do you consider your greatest achievement?Personally, my three children. Professionally, finally understanding the restricted securities tax legislation!
How do you relax?Bell ringing, brewing (and drinking) beer, playing cricket and golf.