For ordinary businesses, there is no source of money to make up for the difference mentioned above when bringing shares to employees. In many cases, employees are recognized as shareholders and companies register to increase chartered capital, but there is no real capital contribution. This will lead to the virtual capital increase and the nullity of the issuance of shares for employee donations. An equity bonus plan allows employees to participate in a company`s success. With this type of plan, a company registers shares on an account held on behalf of its employees to help them accumulate assets for retirement. Often, these plans are used to replace profit-sharing, which provides employees with a stake in the company. Shares granted to an employee through a stock bonus plan are not considered part of their salary. Instead, they are categorized as benefits for workers, which aim to make a job more attractive and encourage an employee to do his or her best. For the shares of existing shareholders, the donation of shares to employees is made in such a way that all or certain existing shareholders agree to give a certain amount of shares to the employer. These particular actions are carried out as part of a civil law agreement between shareholders and existing employees. In this method, the obligation to donate shares is an obligation for existing shareholders, but not for the company. As a result, the company will not offer shares or increase its charter capital. In this case, the shares of existing shareholders will be reduced to the number of shares given to employees.
Stock bonus plans do not translate into a guaranteed amount of money for an employee. Stock values may fall, so that the employee`s shares remain of low value. Nor do these plans allow for diversification. If an employee has corporate shares as the sole investment, he or she may be at a disadvantage in retirement planning. If the company is not doing well, the employee may receive little or no money from the plan when he retires. The obligation to repurchase shares distributed at the request of a worker may be considered a disadvantage for employers. For example, an employee may require his employer to buy back the shares he receives in retirement. However, if the shares are traded in public, employers will not have to buy them.
There are many ways to create incentives for your company`s employees, one of which is to give them a stake in the company. Small businesses that wish to give an incentive to an employee`s participation pay an employee a stock bonus. An equity bonus agreement is simply an agreement by which the company agrees to issue a certain number of shares or value in stock to an employee in exchange for services provided to the organization.