Growth Share Schemes

Herrington Carmichael is a full service law firm offering legal advice to UK and international businesses as well as individuals and families.
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Growth Share Schemes

At Herrington Carmichael our specialist corporate incentive scheme solicitors are able to explain and assist in the design, structure and implementation of growth shares for your business.

Growth Shares typically amplify in value with the company’s success, hurdle shares trigger additional benefits upon achieving performance targets and flowering shares escalate rewards tied to predefined milestones in the business.

These shares are often issued to key employees or executives, as a way to align their interests with the long-term success of the company creating motivated in employees and high retention rates.

The shares may have specific periods attached to them, such as a vesting period or performance targets that are required to be achieved.

Our recent experience has often seen companies link the growth shares to exit events, so that the shares come into play on certain exit events, such as a sale of the business, entitling the holders of the shares to receiver a portion of the proceeds of the sale.

Key contact

Yavan-Brar-PNG
Yavan Brar
Chief Executive Officer

What our clients say about us

I found Alex and Edward to be responsive, on point, quick to answer queries, professional, efficient and the ability to explain complex issues in layman’s terms. An excellent service and one I would recommend to all.

I have worked with Ed on several occasions in relation to the sale of business interests, and once again he and his team have delivered an excellent service. They are highly efficient in preparing and turning around key documentation, enabling me to meet important deadlines and achieve my overall objectives. Ed’s expertise is invaluable, he has consistently identified risks that would not have been apparent to me and has ensured appropriate risk mitigating provisions were put in place. I would not hesitate to recommend Ed and his team at Herrington Carmichael.

I found Edward and the team at HC to be highly knowledgeable and professional in navigating the sale of our business. The terms of the contracts were explained concisely, highlighting areas of potential issue, whilst advising on points which would be normally included in a deal of this nature. This enabled a smooth transaction.

Alex, Ed and the team at Herrington Carmichael provided us with excellent advice and support for our company sale, with their knowledge and experience making the process very efficient.

As an Insolvency Practitioner, Ed has dealt with a number of business disposals on my behalf and the quality of his work never slips. Ed manages to combine the legal and practical aspects of a disposal with consummate ease and it certainly makes my life a lot easier knowing that he is dealing with the legals on my behalf!

I would like to thank Herrington Carmichael for their professional service, namely Edward from the commercial and Daniel from property divisions. Being new in the U.K. and not understanding the processes, they both took time to explain the process and detailed reasons for the clauses put into the contracts. Well done, 5-star treatment. Will definitely use you again.

Navigating the legal and financial minefield that’s attached to a part residential, part commercial purchase, combined with the sale of our house and my parents' house, was certainly challenging. Edward, Daniel and all of the Commercial and Residential teams did a fantastic job of advising us and steering us through this minefield. They understood exactly what the situation was and how to handle it. We put them under deadline pressure, and their response was not only professional, friendly and courteous, but they responded fantastically, often going beyond what we would have reasonably expected. Their communication was great, and they did what they said they would do. Since then, I have also worked with Herrington Carmichael on other business matters and will be doing so again in the near future.

We found Alex, Ed and the commercial team at Herrington Carmichael to be very knowledgeable, helpful and attentive from start to finish when we were selling our IFA business. We would have no hesitation in recommending them.

It was our first company acquisition and we knew we needed first class legal support; we certainly struck gold when with Alex and his team at Herrington Carmichael. Edward in particular was fantastic and guided us through the whole process with pragmatism and a level of calmness that was professional and reassuring. The experience was outstanding.

I was very pleased to be introduced by my accountants to Alex and Ed. They demonstrated from the beginning an in-depth knowledge of the market place dynamics, let alone the subject matter which clearly showed their mastery in this area. When it came time for the asset purchase agreement and negotiations which for me was the first time, Ed provided a comprehensive and professional approach which I found very supportive. All matters proceeded to a successful conclusion.

I would like to thank Ed Beedham for the support and advice he provided during the sale of my business. Whilst I have been running a successful business for some 14 years, my knowledge didn’t extend to the legal side and the elements involved in the sale. Ed’s guidance was very straightforward and presented to me in layman’s terms so that I understood all the aspects of the legal requirements and my obligations relating to the sale. In addition to this, there were elements that hadn’t even crossed my mind that Ed then expanded upon which were of great help. To sum up, if I was to go through a business sale in the future, I would not hesitate in instructing Ed to act on my behalf. In addition to this, I would happily recommend Ed as someone who would be a great partner to work with.

I found Ed to be very efficient when it came to completing and concluding my asset purchase agreement. Everything flowed as one would like it to and the whole process from start to finish was a smooth one and dare I say it, a very pleasurable experience.

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Meet our experts

Dedicated professionals ready to assist you.

Yavan-Brar-PNG
Chief Executive Officer
Alex Canham PNG
Managing Partner, Head of Corporate
Mark Chapman PNG
General Counsel, Head of Commercial & Regulatory
Alistair McArthur PNG
Partner, Head of Employment
Liz Hailey PNG
Partner, Head of Real Estate
Stephen Baker PNG
Partner, Head of Dispute Resolution
Chris-Gemson-PNG
Partner
Sarah Speed PNG
Partner
Edward Jones PNG
Partner
Darren-Smith
Partner
Matt Jenkin PNG
Partner
Graeme Black PNG
Partner
Tim-Hardesty-PNG
Partner
Rachel Duncan PNG
Partner
Cesare McArdle PNG
Partner
Hannah King PNG
Legal Director
Usof Shah PNG
Legal Director
Joel-Gocool-PNG
Legal Director
Nicole Miller PNG
Legal Director
mellisa v2
Legal Director
mellisa v2
Legal Director
mellisa v2
Legal Director
Tom-Hyatt-PNG
Senior Solicitor
Ed Beedham PNG
Senior Solicitor
Sophie Protheroe PNG
Senior Solicitor
Jed Temple PNG
Senior Solicitor
Anna Svensson PNG
Senior Solicitor
Sam French PNG
Solicitor
Dylan Cutifani PNG
Solicitor
Charlotte Keeper PNG
Solicitor
Harry Winkley PNG
Solicitor
mellisa v2
Solicitor
Jo Boxhall PNG
Solicitor
Lucinda-Cameron-PNG
Solicitor
mellisa v2
Solicitor
Rhian Hazeldene PNG
Solicitor
Bethany-Goodhew PNG
Solicitor
Matthew Roberts PNG
Senior Apprentice Solicitor
William Chapman PNG
Trainee Solicitor
mellisa v2
Trainee Solicitor
Zen-Marais-PNG
Trainee Solicitor
Dylan Short PNG
Paralegal
Siddhartha Saxena PNG
Senior Paralegal
hc_team-placeholder
Banking Paralegal
Michelle-Lamberth-PNG
Senior Paralegal

Frequently Asked Questions

Find answers to your most pressing questions about our services and processes.

Only private limited companies can use growth shares as it is a requirement that the company has at lease two classes of shares. Growth shares are a special class of shares issued with the purpose of allowing the growth share holders to benefit from any increase in the value of the company.

Clearly, growth shares are more beneficial for companies with aggressive growth plans as they serve to incentivise key employees to deliver this growth.

For companies, growth shares can be combined with EMI schemes and this is beneficial for tax planning purposes. Further, the issue of shares serves to foster an ownership mentality for the participating key employees and they employees also benefit from there being no income tax payable on the shares.

Hurdle shares can be employed by various companies, particularly those seeking to align employee incentives with specific performance goals. This approach is common in start-ups, private firms and even established corporations aiming to motivate and reward key individuals based on predefined achievements.

Hurdle shares offer companies a mechanism to align employee interests with corporate goals, fostering motivation and dedication. They tie compensation directly to performance, encouraging individuals to contribute to the company’s success and meet specific targets.

Any company can technically use flowering shares, but they shine most for high-growth startups, pre-IPO companies, and those transforming. These types benefit from the long-term focus and incentive flowering shares offer to attract and retain talented employees.

With flowering shares, companies are able to attract and retain talent with ownership potential at low cost, aligning interests with performance-based rewards. Employees then gain equity stake and share in company success, motivated by clear goals and potential tax advantages.