The minimum term for the implementation of the option program. Phantom share (on options). What is an option

09.03.2020

Goals: to motivate company executives to increase the value of the business in the long term, to avoid possible conflicts over remuneration.

How to proceed: assess the possibilities of option programs, fix the parameters of the selected option in an internal regulatory act.

The practice of distributing securities among top managers is very common in global and Russian companies and has different implementation models. At the same time, the choice of certain methods of remuneration of managers depends, first of all, on the tactical or strategic goals of shareholders. Often it is financial director, being a trustee of the owners, is involved in the development of an option program or in interaction with the involved consultants.

One of the main goals of the motivation program is to build long-term relationships with highly professional managers, to retain qualified management personnel in the company for the period necessary to achieve certain business goals.

Key requirements for the options program

The key characteristics of a long-term remuneration program should provide a common vision of the company's future, the coordination of actions of owners and management for its development. After all, in fact, the reward system is one of the tools for implementing a business strategy. Therefore, in the event of a change in strategy, the remuneration system should be adjusted accordingly.

Correctly defined conditions of the option program will increase the motivation to work specifically for the long-term development of the business, and not just for solving short-term momentary tasks. Regardless of the form of reward program chosen, owners need to achieve the following:

1) the business development strategy for the period of the option program must be clear to all its participants;

2) the specific goals of the participants, the implementation of which determines the implementation of the program, must be clearly formulated, correspond to their competencies and logically correlate with the business development strategy for the selected period;

3) the mechanism for determining the results should be transparent and understandable to the participants in order to exclude the risk of a reverse “demotivational” effect (this risk affects companies whose shares and indicators cannot be determined by an objective market mechanism - the market value of shares, sectoral indices, etc.).

There are many requirements that can be classified as key. Within the framework of this article, the authors, being lawyers, highlight exactly those characteristics of the main types of option programs that, not always having an obvious legal nature, make it possible to minimize future disputes regarding the results of their implementation.

Real Options Programs

Traditionally, option programs are considered to be the most effective long-term motivation programs, when managers are offered to buy a certain number of company shares at a predetermined price. In the literature, these programs are called classical.

Providing management with the opportunity to become owners is an effective tool for improving the quality of management both at the stage of company development and in relation to large corporations whose shares are traded on the stock exchange. However, it should be borne in mind that the transfer of rights to shares within the framework of the program not only determines the pronounced motivational potential of the program, but also requires painstaking structuring in compliance with the requirements and restrictions established by law. From a legal point of view, an option program is a set of relations between a company and participants (and sometimes third parties), which must be formalized by concluding relevant agreements. Wherein Russian law involves a limited set of tools for formalizing relations within the option program, which allows balancing the interests of all interested parties. On the one hand, these are managers who invest their efforts, skills and time in the development of the company - they must be sure that when they achieve their goals, they will be entitled to the promised remuneration. On the other hand, the company, because remuneration should be conditional on strict compliance with the terms of the program, and any abuse on the part of management is excluded.

It must be recognized that there is no universal contractual structure within the option program that allows you to completely get rid of risks and ensure a reasonable balance of interests of the parties. The optimal legal model is dictated by the conditions of the program itself (the moment of transfer of rights to shares, the need to ensure the so-called non-monetary buyback, the method of determining the price, the composition of participants), as well as the characteristics of the company (in particular, we are talking about the degree of publicity, the share of freely traded shares in their total quantity).

At the same time, we can agree with the often expressed opinion that often the requirements and restrictions of the legislation force us to adjust the motivational program to a legally acceptable shell, instead of looking for ways to legally formalize the essence of the agreements.

First of all, we note that the implementation of the option program, which involves the purchase of securities by participants, requires the company to have a certain number of shares at its disposal. In practice, additional emission for these purposes is extremely rare. Therefore, the implementation of the option program is difficult without the use of a special operating company (SPV, operator). The need to structure the program using an operator is due to the procedure provided for by Russian legislation for the acquisition and disposal by the issuing company of its own shares, namely:

the repurchased shares must be sold by the company no later than one year from the date of their acquisition. Otherwise, the general meeting of shareholders of the company must decide to reduce the authorized capital by redeeming the said shares. At the same time, in practice, the average duration of programs is three years (it is hardly possible to achieve motivational goals in a shorter period);
the selling price of repurchased shares by the company must correspond to their market value, which effectively excludes the possibility of varying the share acquisition price by participants and deprives the program of economic sense.

The listed requirements limit the possibilities for structuring the option program to the limit. The only possible structure that meets them is the redemption of shares by the company and the transfer of stakes to the ownership of the participants directly at the launch of the program at the current (at the time of launch) market price. The expected income of the participants in this case will depend on the increase in the market value of the packages already purchased.

Among other things, the purchase by the issuer of its own shares requires compliance with a number of corporate formalities:

decision of the authorized governing body ( general meeting shareholders or board of directors). But even their decision will not allow to acquire more than 10 percent of the company's outstanding shares;
the decision to buy back the shares entails the emergence of the existing shareholders the right to sell their shares to the company, and the company - the obligation to buy them at the price specified in the decision. Moreover, this obligation is not limited to the number of securities specified in the decision of the authorized body of the company. It is obliged to purchase all the shares offered for redemption within the limit established by law (no more than 10%, but if the shareholders demand that the company acquire more shares, the securities are redeemed proportionally). Thus, the company cannot decide to buy back its own shares from a specific buyer, but can only determine the terms of the planned acquisition. Otherwise, the transaction is void as it does not comply with the law (this conclusion is confirmed in paragraph 13 information letter Presidium of the Supreme Arbitration Court of the Russian Federation dated April 21, 1998 No. 33). You should also remember about the prohibition on the acquisition of the company's own shares before the redemption of all shares presented for redemption by shareholders in the manner prescribed by law;
The legislation contains requirements for disclosure of information both about the decision to buy back own shares and about the fact of the buyback itself.

All of these restrictions can be avoided by delegating the authority to implement the program to a third party - the operator. It can be either a subsidiary or a de facto independent entity (for example, a bank).

In addition, the launch of the project requires compliance with a number of corporate procedures. In particular, the program as a document that establishes the grounds, conditions and procedure for remuneration of management for efficient work, is the company's internal regulations and is subject to approval by the board of directors. At the same time, if members of the board of directors are included in the option program participants, in addition to individual executives, it must be approved by the general meeting of shareholders. Otherwise, it may be challenged.

Example

This risk can be illustrated by the recent litigation on the option program of OJSC Rostelecom, initiated by a minority shareholder. In cassation, the court confirmed that the decision to approve the motivation program, the participants of which are members of the board of directors, falls within the competence of the general meeting of shareholders (decree of the Federal Antimonopoly Service of the North-Western District of January 29, 2013 in case No. A56-52257 / 2011).

The full list of required decisions, the procedure for their adoption, as well as the authorized management bodies of the company in this case will depend both on the composition of the participants and on the structure of the program (use of an operator or direct implementation of the program by the company, types of contracts that mediate the implementation, etc. .).

Taking into account the main characteristics of a real option program outlined above, we can conclude that it can be effectively implemented only in open joint-stock companies. In other organizational and legal forms legal entities, in view of the mandatory restrictions established by law on participation in the authorized capital of third parties (direct prohibition, preemptive right other owners or the company itself), the implementation of the classical option program is either objectively impossible, or so difficult that it does not allow guaranteeing the interests of the participants. However, this does not exclude the possibility of introducing long-term management motivation programs of other types in such companies.

Phantom Options Programs

Not all owners are ready to accept their managers as business partners by transferring part of the shares to them. In addition, sometimes this is objectively impossible, based on legal regulation and specifics of business organization. To solve the problem of structuring an effective remuneration system, long-term remuneration programs that do not involve the transfer of shares to the ownership of managers, the so-called phantom option programs (options), will help.

In the very general view the concept of such programs assumes that their participants do not receive the right to purchase shares in the company, but they can apply for bonus payments, calculated according to a certain formula - the financial benefit of managers depends on the increase in the value of the company's securities over a certain period. Sometimes this reward system is also called phantom shares. The mechanism for implementing the reward program is relatively simple. After determining the categories of employees who are granted the right to participate, for each position, the number of conditional (phantom) shares is determined, which will subsequently be the basis for the calculation financial result provided, of course, that the program will be implemented.

The initial value of phantom shares will be the value of real securities at the time the program starts, just as it happens in "classic" programs.

In the event that their value at the time of option expiration exceeds the value determined at the start of the program, the difference, multiplied by the number of phantom shares of the participant, will be the total manager's bonus. Based on the strategy, management objectives, market conditions and other factors that the company's owners consider significant, the implementation of the program may be complicated by various suspensive conditions.

First of all, the right to receive payment on phantom shares may be conditional on the retention labor relations between the company and the manager at the time of completion of the program. In addition, the conditions may provide for the achievement by the company of certain results, such as entering the stock exchange, certain capitalization indicators. If the program provides only monetary rewards, then there may be provision for milestone payments during the term of the program.

The terms of the program may also provide for the right or obligation of the participant to acquire ownership of the company's shares for an amount in whole or in part, equal to the amount of his monetary reward, determined based on the results of the program. In this case, when developing it, it is necessary to take into account the nuances described in relation to option programs with the transfer of real securities. First of all, we are talking about restricting the company's rights to deal with its shares and, consequently, the need to ensure the operator's participation in the program.

Also, the program can include conditions on the mandatory transfer of acquired real shares to trust management, the beneficiary of which is a top manager. After the end of the trust management period, the papers are transferred to the top manager, who has the right to keep them or sell them. Thus, the company can manage the flow of shares transferred not only to ownership, but also to disposal, and minimize the risk of a significant number of shares offered for sale on the market at the same time.

The authors are familiar with the long-term remuneration program for top managers of the company, which is calculated, among other things, based on the increase in the value of shares. Its conditions are not only approved by the board of directors, but are also reflected as additions in the employment contracts of the relevant employees. Such scrupulousness is quite understandable, since, despite the “phantom” nature of the option program, it is implemented in one of the largest public companies in Russia.

Nuances for non-public companies

The value of long-term remuneration programs for employees of companies whose shares are traded on the market is obvious, also because it is not difficult for them to determine the fair market value. It is the task of determining such a price that companies that launch long-term reward programs at the initial stage of development have to solve. Or companies whose organizational and legal form does not imply the issuance of shares at all (for example, for limited liability companies). In this case, the amount of remuneration for participants is calculated using various indicators of the company (revenue, EBITDA, net profit, etc.).

Long-term reward programs initiated by non-public companies are more exposed to the risk of non-transparency and bias.

It is all the more important to involve the managers themselves in the development of their structure and conditions. Otherwise, a program based on evaluation criteria and a non-obvious system for determining the value of a company will work inefficiently. The same factor blocks the possibility of implementing long-term remuneration programs in companies that are a single business (realizing the business interests of the same group of beneficiaries), but not legally consolidated.

The authors are aware of examples of the implementation of this kind of long-term remuneration programs in companies, although not public, but representing businesses, in terms of their size, they are much higher than average. The condition for receiving remuneration is the achievement by the company of a certain level of net profit if the value of the same indicator for the previous year is exceeded, as well as if the top manager fulfills KPIs predetermined for him. The reward under the program is paid out in three predetermined unequal parts, while the amount of remuneration is determined based on the results of each of the three years (the duration of the program). Thus, a top manager who joined the program in 2009 will in 2013 simultaneously receive a third part of the remuneration determined based on the results of 2010 and the second part of the remuneration calculated for 2011 and in full for 2012.

As far as the authors know, in this case the program is quite effective, but its effectiveness is primarily due to the trust between the owners and top managers, who guarantee payments in accordance with the announced conditions with their word, and also involve top managers themselves to approve their personal goals. This refutes the approach that phantom options are only effective in public companies.

Advantages and disadvantages of phantom programs

An obvious disadvantage for participants in phantom programs, expressed in the non-acquisition of real shares, turns into a boon for existing shareholders of the company, who are not at risk of dilution of shares.

It is generally accepted that the relative ease of implementation of such a program results in less security for top managers, since in order to launch options for a company, it is enough to accept a local normative act, which can be unilaterally canceled by it. However, to protect top managers from such unilateral actions of the company, it is enough to amend labor contract reflecting the conditions and procedure for paying remuneration.

In conclusion, it is worth noting that cash payments to top managers under a long-term remuneration program can have a significant impact on a company's profits. Accordingly, the organization should take care to create an appropriate reserve to fulfill its obligations to top managers.

Options in the company stocks today are relevant all over the world. In the largest multinational companies, options are already included in employee loyalty programs, but medium and small companies, as a rule, do not know anything about them. Moreover, options are a great way to motivate managers without much investment.

What is a company option

For more than 30 years, the West has been encouraging top managers not only through high salaries and bonuses, but also through options to purchase the organization's shares. Thanks to the features of this system, the results of the work of specialists can be linked to the efficiency of the company. Options make the manager partly the owner of the company.

The best workers are enterprising employees. They are full of new ideas, they are ready to work hard and take responsibility. But they are also the most dangerous - sooner or later they decide to work for themselves. At best, they will simply leave and create their own business, at worst, they will take your information, a pool of customers and become competitors.

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The essence of the option is as follows. The company undertakes to sell its shares to the employee after some time at a fixed, pre-agreed value. In the event of an increase in share prices by the time the option is exercised, they can be redeemed, and the employee receives additional income by increasing the capitalization of the organization.

Options are considered a beneficial solution for both parties - the employee and the company. The company is confident in the loyalty of an employee that it can retain in its staff, because on average these programs are designed for 5-7 sometimes and 10 years. The use of options also contributes to savings on wages, while managers have the opportunity to earn a decent income. The increase in the price of the company's shares by the time the employee buys it out will help him get a solid income.

Options, namely the practice of their introduction into the activities of Russian companies, originated only 10 years ago, but already has solid development prospects.

Practitioner tells

Vladimir Yakovlev, Chairman of the Board of Directors and owner of Absolut, Arkhangelsk

When I worked at a bank, we offered shares to middle managers. Each of them received 3% of the bank's shares, becoming a minority shareholder. The total number of shares was such that minority shareholders, even if united, could not seriously influence the adoption of any decision.

At first everything went well: the co-owners did their job better than others, stayed overtime, double-checked documents, tried to support high quality client service. The problems started when the first of the minority shareholders decided to quit and sell his shares. In a closed joint-stock company, other shareholders, that is, in our case, employees, have a priority right to buy, and the board of directors must set the price and approve the purchase. But to collect it because of the penny contract seemed unreasonable. Therefore, the shares could not be sold. As a result, the whole team found out about these significant difficulties, and participation in the share capital ceased to be effective method motivation. Employees no longer took shares seriously, because, being their owners, they could not do anything with them. Later, the bank was liquidated, and the employees never received dividends.

I know from experience that it is worth offering shares to employees only if the business is stable, the company has developed a clear development strategy and defined criteria for assessing the contribution of employees to the overall result. A minority shareholder must have a good idea of what he is working for and what personal indicators he must achieve in order to increase capitalization. If you offer options in the company instead of shares, then it is important to indicate in the contract how long the employee undertakes to work in the company after the acquisition of shares, what will happen if he is fired or transferred to competitors, under what conditions the company can redeem the shares.

What are the options in the company

Target option program. When certain results are achieved, the manager can buy back the shares of his company, becoming one of the shareholders. If the tasks are not solved, there can be no talk of remuneration. But the achievement of results depends not only on the efforts of the manager. In this regard, options of this type can lead to negative consequences for further motivation.

Unconditional options. Under this system, managers are given the right to buy back shares at a price below the market price without any conditions. In fact, a manager can immediately sell shares after receiving shares for a premium on the difference between the cost of his purchase of shares and the market value, but this usually does not happen. Managers are counting on the growth in the value of shares in the future, making efforts for the development of the company.

Phantom option plans are suitable for those companies that do not plan to dilute their share capital. Phantom options mean that the shares are not transferred to the employee, but only a monetary reward is provided, but its size will depend on the dynamics of the market value of the organization's shares.

Top Manager Compensation Package: Key Elements

Real examples from practice about options

1. Until 2005, VimpelCom (Beeline) used phantom options. Employees were provided with a financial difference between the initial price of their conditional package and the price at the end of the specified period. The shares were not redeemed. Since 2005, managers have been offered traditional options.

2. Lukoil also used phantom options to encourage managers to increase capitalization. It was later decided that the additional stimulus could be obtained not through options, but through the provision of securities.

3. In June 2007, the board of directors of MTS approved a staff remuneration program. To this day, it includes performance bonuses and phantom options based on the performance of the company's stock.

4. After a private placement, Nutritek introduced phantom options in 2005. Two years later, the placement of shares on Russian stock exchanges began, and employees began to receive bonuses up to $10 million.

What should be the real options in the company

Under correctly defined options conditions, the motivation of employees for the long-term development of the business increases, and not just for short-term tasks. In any form, options as a reward must provide the following:

Clarity in use for all participants of the business development strategy for the duration of the option program;
Clarity of the formulation of the specific goals of the participants, which determine the implementation of the option program, compliance with the competence of employees, correlation with the company's strategy for the reporting period;
A clear and transparent mechanism for employees to determine the results from the implementation of options.

How to implement options in a company

Stage 1. Set goals

Options should be clearly understood by employees, and the choice of intermediate results indicators is available to the board of directors. This is necessary for the proper organization of the balance of rights and obligations of participants. The consequence of the fuzzy definition of goals is the loss of interest of participants in options.

Four questions should be carefully considered before organizing the construction of an options program in a company:

What goals do you plan to achieve through the options program?
What options will help to reach the planned result?
What other options were considered in the company to achieve these goals, apart from options?
What criteria will be used to evaluate the success of the options program?

Stage 2. Choose the type of option program

You need to decide:

How strongly the status of an employee must be correlated for an options program to achieve positive results.
Will the employee-shareholder have the opportunity to influence management decisions.
Will he have extended access to information.
How the role of the employee will change in the workforce.

Stage 3. Thinking about the limits of options

Each type of option is characterized by its own characteristics in terms of the management structure, taxation, balance of power between the main owners and minority shareholders, the right of the owner to retain shares or an option after dismissal, the right to sell to third parties, transfer by inheritance, etc.

Before structuring an option, its boundaries should be clearly defined. This will make it possible to determine the appropriate legal form for an option.

Minority shareholders have certain rights in relation to the company whose shares they received, therefore, when setting the size of the option program, one should rely not only on the maximum possible size of potential payments, it is necessary to clearly consider the permissible level of involvement of employees in managerial decision-making.

Employers, in practice, set the size of the option program so that the totality of the votes of employees does not allow them to significantly influence management decisions.

Payment of the "golden parachute": 4 conditions when you can refuse a top manager

Practitioner tells

Svetlana Epikhina, Head of Human Resources Department, Inter RAO UES, Moscow

If you make an employee a co-owner of the company (for example, through options programs in the company), his status must change, otherwise you will not achieve any positive effect. This is not about changing positions, there are other ways. In order for an employee to feel like a master, he must be able to influence managerial decisions, the opinion of the workforce, and gain access to more information; his judgments about the problems and strategy of the company should be listened to.

The main owner should think before deciding to dilute his share. He needs to realize what awaits him with the advent of new co-owners. For example, monetary and time costs for organizing the work of the board of directors may increase (voting processes, notification of all shareholders, etc. will become more complicated). Unforeseen difficulties may arise during meetings. For example, a minority shareholder, fearing not to be heard, may rush to the podium, only to express his dissatisfaction with current activities, and not to propose a solution to the issues on the agenda.

I note that today for many employees, even top managers, option programs are not interesting due to the instability of the stock market. Pessimistic forecasts of various analysts always work against options programs.

Stage 4. We issue and place company options

Options are issued in accordance with the rules and procedures laid down federal law No. 39-F3 dated April 22, 1996 "On the Securities Market" (hereinafter - the Law on the Securities Market). The company must also comply with a number of requirements:

Fully paid share capital.
Mandatory reflection in the charter of the provisions on declared shares, the right to receive which is provided by the options of the organization.

The company's options are placed in non-documentary form, usually by closed subscription among the executives who participate in this program. Options are equity securities that top managers must sell no later than 1 year from the date of state registration of the issue.

The text of the decision to issue an option must indicate the price at which the shares will be purchased or the procedure for determining the price. The issuer's option price is also determined. Under this program, it is possible to distribute no more than 5% of the shares of the category among the top management, which has already been placed on the day of submission of documents for state registration of the issue of options.

Stage 5. We issue options

Domestic legislation does not establish provisions that would clearly regulate the form of the option. Consequently, the main aspects of option programs are covered by collective or labor agreements, as well as a separate document that regulates the rules and procedures in relation to the established program.

To transfer an option, an employee should establish an appropriate clause in the employment contract, supplementing the provision on bonuses, or formalize this fact in a separate contract. As an option - in the form of an option transfer agreement or a sale and purchase agreement. It is preferable to choose an option transfer agreement, since rather complex legal relationships are assumed.

Stage 6. Converting the company's options into shares

After the expiration of the established deadlines or upon the occurrence of due circumstances, the owner has the right to convert the option into shares of the organization, therefore, to become their owner. Conversion is made only in shares of additional issue. This is due to the fact that, under the current legislation, the conversion of the option into shares of the company that are already in circulation is not established.

It is possible to structure long-term remuneration programs using shares as a set of civil law contracts, in which the main goal is to provide top management with the opportunity to purchase shares at a predetermined price.

Are options taxed?

very complex and controversial issue. According to Article 236 of the Tax Code of the Russian Federation, there is a provision according to which settlements and property rights related to the purchase and sale of property do not belong to the taxable base for the unified social tax. If you include a provision on options in an employment contract, the corresponding position is not so clear. When drawing up a separate agreement regarding the option, the company receives additional arguments not to include these payments in the base for social tax.

In practice, options are implemented through operator companies, which are created for this. The operator is a professional intermediary, a broker who administers the option program. In particular, he should keep records, accounts, send information about the program to employees, obtain their consent to participate, collect tax information and solve a whole range of administrative tasks.

A company with a dealer or broker license in the securities market can act as this broker in Russia.

Attracting foreign top managers: 3 stages of poaching the best of the best

If you are offered an option

The nature of an option must be understood, because options are incentives that can be earned or not. Not everything can be in your power.
Options are not free. This share of the company will be redeemed for its own money.
Stay realistic. If you are promised an option in a startup that does not bring a net profit, it will not be possible to derail a huge reward even with the most responsible and efficient attitude to work on your part.

Practitioner tells

Ruslan Vesterovsky, HR Director, Wimm-Bill-Dann - Foodstuffs (dairy business), Moscow

Over 60% of remuneration in Western practice is provided to managers as long-term programs, as options. Thanks to this method it is possible to increase the interest of managers in increasing the profitability of the common cause, but also in increasing the capitalization of the enterprise. Western options are on average calculated for up to 10 years. What stimulating effect can be provided by this option, if in Russian practice Does an employee stay in the company longer than 3-5 years?

With regard to options programs, top managers often ask questions about what may not affect all indicators. After all, the change in the company's value can be regarded as a certain lottery, in which much will depend on the market situation.

Any actions of a manager in the Russian stock market can be changed by market adjustments. Options in domestic practice still remain a premature instrument. The attitude of most managers towards them develops in this way: they will succeed in getting it, excellent, if I don’t get it - but I didn’t do anything for this.

We tied the top manager's assessment to his level of sales, profit indicators, etc., therefore, he is motivated to improve these indicators, tries to launch long-term investment projects in an effort to achieve short-term results.

Typically, employees evaluate their performance in comparison with the achievements of colleagues. The average in a company does not tell who contributes more to the overall result, so for employees, the optimal behavior strategy is to demonstrate average performance - let someone else do the hard work of maximizing the company's value and reducing costs.

If you are considering implementing options in a company

Don't give options left and right.
Document the conditions for the redemption of employee options.
Give options primarily to engineers and salespeople, since the quality of products and the level of sales will primarily depend on their work.

Practitioner tells

Vladimir Altergot, Senior Associate, Pepeliaev, Goltsblat & Partners, Moscow

There is a method of motivating top managers, different from options, but close to them in meaning. Its essence is that money is deposited to the account of the General Director in the bank. The amount grows, but the General Director has the right to withdraw them only after a certain period. By law, a third party in whose favor a deposit is made acquires the rights of a depositor at its first request to the bank, unless otherwise provided by the bank deposit agreement (Article 842 of the Civil Code of the Russian Federation).

In order to protect both parties (employer and employee) as much as possible, two conditions for receiving money should be fixed in the bank deposit agreement. The first is the procedure for the employee to contact the bank, the second is the need to work for a certain period of time with the employer. Working off is confirmed by a work book or directly by the employer. It turns out something like a letter of credit, for which it is necessary to submit a number of documents to the bank. The employee claims the intention to exercise the rights of the depositor under the contract immediately. In accordance with Art. 430 of the Civil Code of the Russian Federation, the contract can no longer be changed or terminated without his consent. work book the employee brings after the expiration of the period specified in the contract.

By virtue of the principles of freedom of contract and civil law optionality, the parties to a tripartite deposit agreement may provide for a condition that in the event of dismissal (documented) before the expiration of the period specified in the agreement, the deposit is returned to the contributor (employer).

Pros and cons of option programs

Options of any type significantly reduce the operating costs of the enterprise to reward top managers.
Options provide for the carry forward of expenses indefinitely.
Options guarantee stimulation, direction of actions of top management for the development of the organization in the long term.
Investors of different groups perceive the practice of using options in the company well.

Options do not guarantee a profit for management.
The relationship between activity and the price of an organization's shares is ambiguous.
The price of a company's shares may decrease for various reasons that do not depend on the actions of employees.

Practitioner tells

Igor Ostrovsky, Senior Partner, KSK Group, Moscow

We do not have classic options, but we have a quasi-option. We provide the tops, on whose work the income of the business depends, the opportunity to buy out part of the profits. The number of top managers in the company is the same: financial and commercial directors, directors of production, logistics, personnel, IT-sphere. Choose those who influence the development of your company to the greatest extent. We have a financial and commercial director. Let's say that the profit for the year was $1 million, while the company has excellent growth potential.

We offer the manager to buy 1% of future profits ($10,000). And if the company's profit doubles in a year, then the manager will receive $20,000 already. That is, the more thoroughly the company grows, the more the manager will receive. However, it is impossible to persuade him to redeem a part of the expected profit: it is important that he seriously considers this step.

After all, the manager takes a risk: if the profit is less, he will lose part of the money. In addition, the manager must pay out of pocket and immediately, and not later, from bonuses or in installments. A quasi-option, among other things, is a psychological incentive based on a person's personal decision to actually buy. Only then does this form of encouragement force the top manager to make efforts to develop his own company.

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A boom in option programs has begun in Russian companies. But if this method of rewarding managers is thoughtlessly implemented, the fashion for it can turn into a big disappointment.

Money the day after tomorrow

Yahoo! Terry Semela- only $1 per year. But it is reckless to think that the manager lives from hand to mouth - over the past three years he has earned $ 429 million on the implementation of options programs and voluntarily forfeited his salary in exchange for new options. Soon, multimillion-dollar incomes of top managers will become commonplace in Russia as well - in many companies, for example, in RAO UES of Russia, Vimpelcom and others, in the next year or two, the time will come to exercise previously issued options.

Options are considered one of the most effective means of long-term motivation. Their essence is that for certain merits, the manager gets the right to purchase shares of his company at a fixed price in a few years or to receive in money the exchange rate difference that has arisen over the years. Thus, the amount of remuneration is associated with the growth of the company's capitalization.

At first, options were not particularly popular in Russia. Until 2001, only a few Russian companies offered them - for example, the same VimpelCom, IBS, LUKOIL, Capital Gastronomy. But in the period from 2001 to 2006, more than a dozen large Russian companies, including RAO UES, Alfa Group, Mobile telesystems and RBC announced the introduction of option programs. And in 2006, Russia was already gripped by a real option boom - at least 18 large companies announced the introduction of such programs.

Apparently, such explosive growth is associated with a wave of Russian IPOs - companies that go public need management to work to increase their capitalization. Of the 18 companies that announced the introduction of option schemes in 2006, three held an IPO last year (Rosneft, Comstar and Sistema-Hals), while Sitronics, Mirax Group, Polyus Gold and The Energy Machine Building Alliance intends to make its debut on stock markets in 2007-2008.

Another reason for the options boom was the sharply intensified competition in the labor market - last year was extremely rich in mass transfers of top managers. The introduction of option programs was announced by companies that have already experienced serious personnel shocks (for example, Alfa Capital). In addition, firms chronically suffering from a shortage of managers have thought about options. So, in the spring, Gloria Jeans, famous for its high turnover of managerial personnel, announced the opening of an option program.

At first glance, all these enterprises act quite logically. Meanwhile, in the US and Europe, options programs have proven to be not the most effective tool, and employers en masse have already begun to refuse them (see help). Of course, the Russian market (especially the stock market) lives by its own laws. But weren't Russian employers wrong when they chose options as a tool for motivation, and especially as a moment for their implementation?

Optional carrot

The motivational mechanism of the option is based on the manager's long wait for a reward. Each option has a vesting period - the time from its receipt to the moment of implementation. On average, it is from two to five years, and if an employee leaves the company during this period, he loses the right to shares. Thus, the manager who received the option is not materially interested in changing jobs.

Typically, a company must first set aside a portion of its shares for an option fund. It usually buys back its shares in the market. Then, an agreement is concluded between the employee, the company and the stock broker, provided for by the standard of the exchange on which the shares are traded. It details the conditions for obtaining and using the option. “If a company breaks the contract, it can lead to sad consequences, up to the removal of its shares from the auction,” explains vice president of human resources and organizational development VimpelCom Marina Novikova.

Although large companies transfer no more than 2–3% of shares to option funds, managers can make good money on the difference in their rates. For example, according to Marina Novikova's calculations, each year can bring VimpelCom's option manager 100% of his annual salary. In 2007 the company will launch the third option tranche. According to Novikova, more than 200 people received options, ranging from CEO and ending with department heads. One third of that number are employees. regional offices companies. “An option is a good means of motivating employees who are offered to work, for example, in Tajikistan,” explains Marina Novikova. “I personally know people who wanted to leave VimpelCom, but did not leave, because they were offered to participate in the option program” .

“Options are a great way to retain managers,” agrees HR director at DeltaCredit Margarita Denisenko. After DeltaCredit was bought by the French banking group Societe General at the end of 2005, the bank's executives received an option on the group's shares. And a year later, the key managers of DeltaCredit are still working in their places, although they are in great demand in the labor market.

At first glance, there is no reason to doubt the reliability of option schemes. And yet, Russian managers do not yet have much confidence in the fashionable tool.

Credit of mistrust

The most main reason distrust - in the lack of understanding by managers of the intentions of their companies. For example, many firms at one time publicly announced the introduction of option schemes, but some promises remained empty words.

So, in the spring of 2004, the Shatura company announced the transfer of 10% of the shares under the option program. It was assumed that the shares will be received by the heads of two production and trade divisions, as well as their deputies. However, recently the PR director of Shatura Vadim Bakhtov declared SF that the company did not plan to give these shares under options at all. Moreover, Bakhtov could not give a clear explanation of why the stock fund was created. Wimm-Bill-Dann back in 2003 also reserved its 3% stake for options, but, as a company spokesman said Anton Saraikin,"The process of introducing options into WBD is still under discussion."

Such failure to fulfill promises has a negative impact on the attitude towards option schemes. "Managers don't trust options," says Managing Partner at Head Solutions Mikhail Elizarov. So, out of 1049 public companies, most have virtually nothing to offer their employees. For example, the share price of Wimm-Bill-Dann had been unstable for several years, and there was no point in issuing options.

But even if the capitalization of the company grows, the employer may consider that he overpaid employees and force them to change the terms of the option. So, in the spring of 2006, 13 managers of the Pyaterochka network received an option for 6.6 million shares at a price of $0.25 per share with the right to buy them in 2008. However, already at the end of 2006, the company closed the options program ahead of schedule, paying managers the difference in the value of the shares, which, according to X5's communications director retail group(owns the Pyaterochka network) Gennady Frolov, was about $67 million. Managers, of course, received a good profit, but, according to analysts, they could have earned even more if they had refused the company's offer and waited until the set expiration date of the option. In fact, the company bought back the rights of the options.

Finally, the organization can achieve the dismissal of an employee and thereby completely deprive him of option payments. “Employees are aware of this and therefore treat options as a pleasant but ephemeral reward,” says Mikhail Elizarov.

Non-Public Hero Award

More the situation is more difficult with option programs developed by non-public companies. Since their shares are not traded anywhere, they use "phantom" options. That is, first the owner evaluates the value of the company, on the basis of which the value of the share allocated for the option is calculated. Then, before the options are exercised, he again evaluates the value of the business, and the employee receives the exchange rate difference of the conditional shares due to him. Another way for a non-public company is to link the option to the company's IPO, after which the employee can buy back a predetermined block of shares.

However, employees of non-public companies have no guarantees of payment of the promised money, since no third party is involved in the agreement, and the Russian labor law does not regulate option programs. For example, Deputy CEO of Rambler Media Ivan Zasursky left the company at the beginning of last year, without waiting for the reward for the successful IPO of the company, held in the summer of 2005. The option program assumed that eight key top managers of Rambler Media, including Zasursky, would be able to buy back 2.1% of the shares in stages. However, after the company entered the stock exchange, Zasursky was excluded from the number of options - probably, his contribution to the IPO was considered not so significant. He did not have the opportunity to defend his option, because, according to him, although he was included in the option plan, he did not conclude any written contract. As a result, the manager left the company. “Now I am suspicious of options, and if I am offered them again, I will definitely hire a lawyer to protect myself from deception,” says Zasursky.

If an employee of a non-public company still receives a share in its property, and not the difference in the value of conditional shares, then the fate of his package is unenviable. He is not entitled to dividends, and in the event of leaving the company, he is obliged to offer his package to shareholders. The cost of such a package is discussed during the negotiations, but often the shares have to be given away almost for nothing.

Questionable loyalty

Optional programs may not reach their goal for one more reason - on a heated to the limit Russian market labor long-term means of motivation work poorly. Today, managers have every opportunity to get rich quick, and as a partner at Ecopsy Consulting explains Roman Ivanov, they are not ready to wait for a reward for three to five years.

In addition, a powerful “anti-option tool” has recently been gaining momentum - a sign in bonus (an entrance bonus upon entering a job). According to Amrop partner Hever Anton Storozhenko, the size of such a bonus can reach several hundred thousand dollars. Career advancement can also outweigh the benefits of the option. “In my practice, there was a case when a candidate refused millions of options because another company offered him a higher and more promising position,” recalls Anton Storozhenko.

Finally, option programs do not always strengthen staff loyalty and motivate employees. “Inefficient managers who managed to get into the option plan, by hook or by crook, try to sit out until the expiration date of the option,” says Anton Storozhenko. leave, and ballast accumulates in the leadership.

Perhaps the small return on options programs is due to the fact that Russia is simply not yet ready for their expansion. This tool only works if there is mutual trust between the owner and the manager, but both sides have reason to doubt each other. Owners are not always able to tempt managers with options - only a small number of stocks show stable growth. Besides, the legislative framework for options remains insufficiently developed, which opens the way for breach of agreements. Under such conditions, many managers become easy prey for competing companies that are capable of more interesting offers. So the number of option programs in Russia will not soon develop into quality.

Motivation, Incentives, Remuneration, KPI, Benefits and Compensation

owners

effective exchange rate difference

securities at your disposal. True, at a price fixed on the basis of a tripartite agreement between an employee, an employer and a stock broker
, which describes the conditions for obtaining an option and restrictions on the ownership of a variation

Optional programs are implemented in two versions - real and phantom. In the first case, the employee gets the opportunity to sell the real shares provided to him after a certain time at a market price (liquidity). In the phantom version, the company undertakes to pay the employee a certain remuneration in a few years, tied to the market value of the securities, that is, in fact, the difference between the price at the time the option was granted and the price at the time it was exercised. The advantage of such a system lies in the absence of additional issuance procedures
shares or buying them in the market.

The reasons for the emergence of option programs in Russia can be identified as follows. First, the growth of IPO companies, which, when they go public, need management to work to increase their capitalization. Secondly, the intensification of competition in the labor market of top management during the period of economic growth. Third, options are by and large not securities.
, they do not need to be issued in the name of the employee. Often, shadow stocks are used instead, i.e. obligations of existing shareholders to pay the employee the difference between the share price at the time of his start and at the time the option is exercised. At the same time, the shares themselves at this moment may not change ownership and be owned by the company or its key shareholders.

In April 2003, he approved the program for corporatization of employees. 10.9 million shares (1.3% of the charter capital) were purchased on the market. It was assumed that at the end of 2006 the managers would be able to buy back the shares at the weighted average price for the 1st quarter of 2003 on the RTS. The second stage of this program, designed for 3 years, began after the strategic partner of LUKOIL ConocoPhillips increased its share in the authorized capital Russian company up to 20%. It was also reported that LUKOIL in the years. will allocate $3bn to buy back its freely traded shares. With a capitalization of $66.8bn at the beginning of 2007, the company could buy back about 4.5%.

trust management of joint-stock companies

November 6, 2002 All options were exercisable 270 days from the grant date and expired 365 days from the grant date. The option program included the issue of ADRs for 9.3 million shares of NK (0.5% of the UK) at a price

OPTIONAL PROGRAMS IN THE STAFF INCENTIVE SYSTEM

Option from lat. Optio - choice, desire, discretion. The concept first appeared in America in the 1970s. Employee participation in company ownership was used to improve business performance. An option is an internationally recognized method of combining the interests of owners and hired managers. Option programs were supported by the state, which provided tax incentives to enterprises that implemented such programs.

Options are considered one of the most effective tools for long-term staff motivation. Their essence is that for certain merits, the manager gets the right to purchase shares of his company at a fixed price in a few years or to receive in money the exchange rate difference that has arisen over the years. Thus, the amount of remuneration is associated with the growth of the company's capitalization. The motivational mechanism of the option is based on the manager's long wait for a reward. Each option has a vesting period - the time from its receipt to the moment of implementation. Thus, the manager, having received the option, is not financially interested in changing his place of work.

In practice, the scheme for obtaining an option is as follows. The company reserves a certain part of the shares, determines the range key managers, which in a few years (2-7) will be able to obtain securities of the right of ownership. If an employee leaves before the expiration date of the agreement, then, as a rule, he loses the right to the option. Numerous variations of such programs are associated with additional conditions that may affect the premium or discount relative to the option rate in order to motivate managers to increase the value of the company above the industry or market index.

In this regard, the main problem of options should be noted. Traditional incentives involve the receipt of remuneration of personnel for the economic results of the organization's activities and it is associated with the dynamics commodity market. In the case of options, the income depends on the situation in the securities market, i.e. financial market. An attempt to connect financial logic with interests employees forms a model of financial participation. We are witnessing the exchange socialization of remuneration for work. This practice is being developed in the context of a long period of growth in the exchange cycle. The stock market crisis will contribute to the partial restoration of traditional mechanisms in this area. Thus, the inherent instability financial sector, is transferred to the sphere of the real economy.

In addition, option programs, like any complex employee incentive mechanism, have their pros and cons, which in general can be reduced to the following arguments.

As "for" it can be noted:

· Focus on long-term effects (balance of interests with strategic investors);

· Ability to reduce current cash payments (economical);

· Reduction of tax payments;

Creating the effect of retaining top managers

· The risk of non-receiving of benefits by participants in case of high amplitude of stock market fluctuations or low liquidity;

· Violation of the incentive principle in case of market inefficiency;

· Possibility of erosion of the capital structure and loss of control;

· Possibility to reduce the share of freely traded shares (free float);

· Expenses both for the introduction of programs, and for monitoring and implementation (when buying back shares on the market);

Weak legislative regulation and insecurity of participants.

Various schemes of option programs have been implemented in Russia, which we can consider using the example of oil producing companies.

April 2003

In 2006, Surgutneftegaz bought up more than 0.5% of its shares on the market, spending more than $250 million. The program is designed for two years and it is planned to buy back about 5% of the shares

The capitalization of Surgutneftegaz in the RTS in 2006 amounted to $53.6 billion. Based on this price, the company spent $268-375 million to buy up its shares.

To implement the option program, Surgutneftegaz created management company, on the balance of which the shares are entered. The advantage of this scheme is that the shares intended for employees are reflected in the balance sheet of the employing company as funds transferred to trust management, while it does not have an obligation to sell shares during the year. Treasury shares, according to the law on joint-stock companies, do not have a vote, are not taken into account when counting votes, dividends are not accrued on them, and they can be on the company's balance sheet for no more than a year, and then must be redeemed or sold.

If Surgutneftegaz bought the shares on its balance sheet, it would only have a year to exercise the options, which is too short a time for an options program. Participation in the option program of an external player, and not the own treasury, is also beneficial for employees, since this gives them some protection from the fact that the employer “changes his mind”.

state corporation

302, half the current market value (

OPTIONAL PROGRAMS IN THE STAFF INCENTIVE SYSTEM

In practice, the scheme for obtaining an option is as follows. The company reserves a certain part of the shares, determines the circle of key managers who in a few years (2-7) will be able to get the securities at their disposal. True, at a price fixed on the basis of a tripartite agreement between an employee, an employer and a stock broker, which describes the conditions for obtaining an option and restrictions on property rights. If an employee leaves before the expiration date of the agreement, then, as a rule, he loses the right to the option. Numerous variations of such programs are associated with additional conditions that may affect the premium or discount relative to the option rate in order to motivate managers to increase the value of the company above the industry or market index.

In this regard, the main problem of options should be noted. Traditional incentives involve the receipt of remuneration of personnel for the economic results of the organization's activities and it is associated with the dynamics of the commodity market. In the case of options, income depends on the situation in the securities market, i.e., the financial market. An attempt to combine financial logic with the interests of employees forms a model of financial participation. We are witnessing the exchange socialization of remuneration for work. This practice is being developed in the context of a long period of growth in the exchange cycle. The stock market crisis will contribute to the partial restoration of traditional mechanisms in this area. Thus, the internal instability inherent in the financial sector is transferred to the sphere of the real economy.

In addition, option programs, like any complex employee incentive mechanism, have their pros and cons, which in general can be reduced to the following arguments.

As "for" it can be noted:

· Focus on long-term effects (balance of interests with strategic investors);

· Ability to reduce current cash payments (economical);

· Reduction of tax payments;

Creating the effect of retaining top managers

· The risk of non-receiving of benefits by participants in case of high amplitude of stock market fluctuations or low liquidity;

· Violation of the incentive principle in case of market inefficiency;

· Possibility of erosion of the capital structure and loss of control;

· Possibility to reduce the share of freely traded shares (free float);

· Expenses both for the introduction of programs, and for monitoring and implementation (when buying back shares on the market);

· Weak legislative regulation and insecurity of participants.

Optional programs are implemented in two versions - real and phantom. In the first case, the employee gets the opportunity to sell the real shares provided to him after a certain time at a market price (liquidity). In the phantom version, the company undertakes to pay the employee a certain remuneration in a few years, tied to the market value of the securities, that is, in fact, the difference between the price at the time the option was granted and the price at the time it was exercised. The advantage of such a system is that there are no procedures for additional issuance of shares or their purchase on the market.

The reasons for the emergence of option programs in Russia can be identified as follows. First, the growth of IPO companies, which, when they go public, need management to work to increase their capitalization. Secondly, the aggravation of competition in the labor market of top management during the period of economic growth. Thirdly, options are not, by and large, securities; they do not need to be issued in the name of an employee. Often, shadow stocks are used instead, i.e. obligations of existing shareholders to pay the employee the difference between the share price at the time of his start and at the time the option is exercised. At the same time, the shares themselves at this moment may not change ownership and be owned by the company or its key shareholders.

Various schemes of option programs have been implemented in Russia, which we can consider using the example of oil producing companies.

In April 2003, he approved the program for corporatization of employees. 10.9 million shares (1.3% of the charter capital) were purchased on the market. It was assumed that at the end of 2006 the managers would be able to buy back the shares at the weighted average price for the 1st quarter of 2003 on the RTS. The second stage of this program, designed for 3 years, began after the strategic partner of LUKOIL ConocoPhillips increased its share in the authorized capital of the Russian company to 20%. It was also reported that LUKOIL in the years. will allocate $3bn to buy back its freely traded shares. With a capitalization of $66.8bn at the beginning of 2007, the company could buy back about 4.5%.

The capitalization of Surgutneftegaz in the RTS in 2006 amounted to $53.6 billion. Based on this price, the company spent $268-375 million to buy up its shares.

To implement the option program, Surgutneftegaz created a management company, on the balance of which the shares are entered. The advantage of this scheme is that the shares intended for employees are reflected in the balance sheet of the employing company as funds transferred to trust management, while it does not have an obligation to sell shares during the year. Treasury shares, according to the law on joint-stock companies, do not have a vote, are not taken into account when counting votes, dividends are not accrued on them, and they can be on the company's balance sheet for no more than a year, and then must be redeemed or sold.

Sometimes the issuer conducts an additional issue of shares that form the basis of the option program. Such a scheme was implemented by NK Tatneft. The option to purchase the shares was issued on November 6, 2002. All options were exercisable 270 days from the grant date and expired 365 days from the grant date. The option program included the issue of ADRs for 9.3 million shares of NK (0.5% of the charter capital) at a price of $0.302, two times lower than the current market value ($0.65). The issue was carried out for the management of the company and in fact already contained a bonus. The income of the company's managers from the option program amounted to $4.6 million. However, this method is less popular, since it dilutes the share of shareholders, which causes their natural dissatisfaction. After the implementation of this operation, losses for Tatneft amounted to 155 million rubles. Then the shareholders said that this operation contradicts the very idea of the incentive system: managers should be interested in the growth in the value of shares, and not receive them practically for free.

The state corporation Rostekhnologiya, which wanted to gain control over KAMAZ JSC, faced a particular problem. The complexity of the situation lies in the fact that 44.4% of KAMAZ shares are owned by Troika Dialog and include a management option. The question is whether the management will receive money from this deal, if it goes through.

Foreign experience shows that at present the use of such schemes is typical mainly only for the United States. In 1997, options paid 10% of the salary of top managers in the UK, while overseas - 42%. Moreover, the number of UK companies offering stock option schemes to employees is gradually declining. At the same time, a number of corporate scandals in the US related to options programs have had an extremely negative impact on the image of options schemes. The conflict peaked over the years. Interests of shareholders of companies in the high-tech sector and their senior management, who profited from the exercise of options, ceased to coincide. Abuses began to spread related to the distortion of reporting, the exercise of options with the receipt of obscenely large rewards that did not correspond to the results of the companies' activities. As a result, over the past three years there have been noticeably fewer companies in the world that use option programs to encourage management. In the United States and Western Europe, there is a clear trend away from employee bonus programs based on options towards programs based on the free provision of shares to employees of companies, the rights to dispose of which are temporarily limited. This is partly due to option plans losing their advantage over equity programs: since 2004, companies in the US and other countries have to expense the estimated value of options at the time they are granted, thereby hurting their financial performance.

65). The issue was carried out for the management of the company and in fact already contained a bonus. The income of the company's managers from the option program amounted to $4.6 million. However, this method is less popular, since it dilutes the share of shareholders, which causes their natural dissatisfaction. After the implementation of this operation, losses for Tatneft amounted to 155 million rubles. Then the shareholders said that this operation contradicts the very idea of the incentive system: managers should be interested in the growth in the value of shares, and not receive them practically for free.

Foreign experience shows that at present the use of such schemes is typical mainly only for the United States. In 1997, options paid 10% of the salary of top managers in the UK, while overseas - 42%. Moreover, the number of UK companies offering stock option schemes to employees is gradually declining. At the same time, a number of corporate scandals in the US related to options programs have had an extremely negative impact on the image of options schemes. The conflict peaked over the years. The interests of shareholders of companies in the high-tech sector and their top management, who profited from the exercise of options, ceased to coincide. Abuses began to spread related to the distortion of reporting, the exercise of options with the receipt of obscenely large rewards that did not correspond to the results of the companies' activities. As a result, over the past three years there have been noticeably fewer companies in the world that use option programs to encourage management. In the United States and Western Europe, there is a clear trend away from employee bonus programs based on options towards programs based on the free provision of shares to employees of companies, the rights to dispose of which are temporarily limited. This is partly due to option plans losing their advantage over equity programs: since 2004, companies in the US and other countries have to expense the estimated value of options at the time they are granted, thereby hurting their financial performance.

Option programs are a recognized tool for motivating top and middle managers. Their essence lies in the fact that the employee is given the right to purchase shares or shares of the company at a fixed price. And when, over time, an individual exercises this right, he gets the opportunity to resell the acquired assets at an increased market price.

Now options are gaining popularity again, including due to an increase in the rate of insurance premiums. After all, the provision of shares or shares to employees at a reduced price is not subject to contributions.

Note that option programs are mainly used in companies whose shares are freely traded on the market and have great potential for growth. But this is not done for the purpose of tax planning, since in such organizations the salary of the highest level already in the first months often exceeds the tax-free limit on contributions.

For cost-saving purposes, options may be beneficial to small or medium-sized organizations. Even if their shares or derivative instruments from shares are not traded on the securities market. After all, a group of companies itself can create conditions for the redemption of shares or shares from employees at the required price and prove its marketability.

Shares in an LLC, like shares, can be the subject of an option.

Option programs are also applicable to the shares of limited liability companies. After all, the participants in the company also have the right to conclude an agreement under which they undertake to sell a share at a set price upon the occurrence of certain circumstances or refrain from alienating it until certain circumstances occur (clause 3 of article 8 on LLC).

To implement the option program, a top manager must first become a member of the company. For example, having received a symbolic share of 0.1 percent, he acquires the right to enter into an agreement to buy out a larger share after some time.

To save money, the option should not be "phantom"

In practice, there are various types of option programs.

Issuer options. It is understood as an issuance security that secures the right to purchase shares (but not shares) of the company issuing the option at a fixed price (Article 2 “On the Securities Market”). The main advantage is that the issue of such options is regulated by law.

However, the procedure for issuing and placing options is quite complicated (Standards for issuing securities, approved by order of the Federal Financial Markets Service of January 25, 2007 No. 07-4/pz-n). In addition, these securities can only be converted into additional issue shares. As a result, an additional issue is required, which can dilute the current size of shareholdings and cause dissatisfaction among minority shareholders.

It is also inconvenient that when using the issuer's option, uncertainty arises with the composition of the participants in the option program. After all, Article 40 on JSC allows shareholders, in certain cases, to purchase equity securities that are converted into shares placed by closed subscription.

Contractual option programs. The most common variant in practice. They are divided into two groups, which we will discuss in more detail below:

classic option, when shares are transferred at the end of the program;
shares with limited circulation, which are transferred at the beginning of the program.

"Phantom" options. Their essence is that participants do not buy shares or shares, but receive premiums, the amount of which is tied to the market value of a certain number of securities or other financial indicators.

However, payments under such options can formally be considered as an object of taxation of insurance premiums, since in fact they differ little from the usual employee bonuses. So saving here is associated with a very big risk.

You will need a friendly assistant to implement the options program

To save on insurance premiums in medium and small companies negotiated option programs are more suitable. Here, in most cases, already issued shares or shares in an LLC are used.

A friendly operator company is usually involved in the implementation of such a program. Shares or shares are transferred to it, the right of redemption of which will be transferred to employees. The need for such an intermediary is due to the laws on JSC and LLC, which do not allow the organization to keep its own shares or shares on the balance sheet for more than a year (Article 72, paragraph 2 of Article 24). After this period, they must be sold at a price not lower than their market value. And option programs, as a rule, last a longer period.

The form of transfer of shares and shares to the operator may be different. Contribution of own shares or shares in the authorized capital of the "daughter" (a kind of cross-ownership). Their sale to a subsidiary. Donation of money with the aim that the "daughter" redeem shares or shares from third parties (the income tax will not arise if the founder owns more than 50% of the authorized capital of the "daughter" - subparagraph 11, paragraph 1). Lending money for the same purpose, etc.

In any case, when making transactions with a subsidiary under the option program, it is necessary to check the parties for interest (Articles 81-83, Article 45). And if it is available, get approval for the deal from the board of directors. Otherwise, there is a risk that the option program may be challenged (Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated January 19, 2010 No. 12320/09).

In addition, a shareholder agreement or an agreement between participants may establish an obligation to coordinate transactions with shares and shares with other participants (Article 32.1, paragraph 3 of Article 8).

Three stages of a classic option

The hallmark of a classic option is the transfer of shares or shares at the end of the program.

Conclusion of a contract for the sale of shares or shares under suspensive conditions(). The agreement between the individual and the operator states that, upon the occurrence of certain conditions, the operator undertakes to sell, and the individual undertakes to buy shares or shares of the organizer at the end of the program at the price that was in effect at its beginning.

As suspensive conditions, the achievement of specified indicators, the preservation of labor relations at the end of the program period, etc. are used. For example, in the option program of the Alfa Capital company, the condition for exercising the option was to achieve a certain amount of assets by a specific period of time.

Interim period. At this stage, suspensive conditions may or may not arise. The shares or shares are owned by the operator, who has the right to vote them and receive dividends.

Implementation of the classic option. Upon the occurrence of suspensive conditions, the employee receives the right to buy shares or shares at the initial price. The employee wins only if their market value at the end of the program exceeds the starting price.

In order to insure an individual against losses, the contract can provide for the possibility of the employee's unilateral waiver of the right of redemption, which he can use in the event of the loss of shares or shares in the price. In this case, the operator does not have the right to refuse the sale.

If the suspensive conditions have not occurred, the rights and obligations of the employee and operator under the named document do not arise.

Three stages of the option under the "with restrictions" program

In such a case, shares or shares are transferred to the ownership individual at the beginning of the program, but for a certain period of time their circulation is limited: they cannot be sold or pledged.

Conclusion of contracts. Here, an individual and an operator enter into several agreements at once:

a contract for the sale of shares or shares with a deferred payment until the end of the interim period;
a repurchase agreement under suspensive conditions, upon the occurrence of which an individual undertakes to return shares or shares;
an agreement on the pledge of shares or shares, which secures the obligations of an individual under the remaining two agreements.

Interim period. During this period, the shares or shares of the main company are owned by an employee who is limited in their disposal, since they are under pledge. At the same time, he, as the owner of shares, has the right to receive dividends. As for the right to vote, in accordance with the terms of the program, it can be transferred to the operator by proxy.

When suspensive conditions occur (for example, poor performance, termination of employment at the end of the interim period, etc.), the repurchase agreement comes into effect.

Implementation of an option under a “restricted” share or share program. If the employee's obligations under the share repurchase agreement do not arise, he receives the right to pay the operator for their acquisition at the price fixed in the sale and purchase agreement. In some cases, the terms of the option program may provide that individuals are provided not with a deferred payment, but with a loan from the operator to pay for the acquired shares. For example, the loan scheme was used in the option program of OAO Gazprom. Accordingly, in this case, at the third stage, the individual repays the loan.

After paying for the shares at the initial price, the pledge is removed from them. The employee becomes the full owner of the shares and can earn on resale.

Sometimes, in the conditions of option programs, a cashless redemption mechanism may be laid. Its essence is as follows: in order to raise money for the redemption of shares, the employee sells a certain number of shares to the operator at the market price at the end of the program. To do this, in advance at the beginning of the program between the operator and the individual is preliminary agreement purchase and sale of shares. Such a scheme was used in the option program of RAO UES.

Tax consequences for the operator depend on the options program

If shares or shares were transferred to a "daughter" by way of their contribution to the authorized capital, then their value is determined based on the tax accounting data of the parent company (). If the "daughter" itself bought them out from the business owners, then the shares or shares are accounted for at the acquisition price.

As for determining income from the sale of shares to an individual, with an option with a buyback at the end of the term, the relationship between the operator and individuals can be interpreted in two ways. On the one hand, an agreement with suspensive conditions can be viewed as a regular contract of sale with a deferred performance. But in this case, the price of shares at the time of sale to an individual will obviously be non-market. This will oblige the operator to accept the estimated price () for tax purposes. He will have a "virtual" taxable profit in the form of the difference between the price of securities in tax accounting and the settlement price.

On the other hand, such an agreement can be considered as financial instrument futures transactions (clause 2 of the Regulations, approved). Here it is applied not at the time of the occurrence of suspensive conditions, but at the time of the conclusion of an urgent transaction, when the marketability of the share price is checked (clause 2). In this case, the operator does not have a "virtual" income tax base. The second option is more profitable, so it is advisable to fix its use in the operator's accounting policy.

In other cases, there are no serious risks. The tax base for the sale of shares under any scheme is determined in a standard way: income minus expenses. And when selling shares “with restrictions”, the risk of applying the settlement price is minimal. After all, the moment of implementation occurs immediately after the start of the option program at the market price at that time, which is unlikely to be lower than the calculated one.

For calculating personal income tax, it is easier to use the option "with restrictions"

The personal income tax of an employee who uses the option depends on its type.

Classic option. At the end of the program, if the market price of the acquired share is higher than specified in the agreement, the individual receives a taxable material benefit in the amount of the difference (clause 4). With the further sale of shares, the amount of materiel with which the tax was paid, and the tax itself paid, are included in the number of the citizen's expenses that reduce his income from the sale of securities (clause 13).

This rule does not apply to shares. Unless the entire system of contracts is recognized as an instrument of futures transactions, but this is unlikely. Therefore, if the option program is based on the sale of shares, the tax base for personal income tax will arise for an individual not in two stages, but only when they are actually sold to a third party. But in aggregate - approximately in the same amount.

"Restricted" option. If the market price is set in the contract for the sale of shares or shares, then at the time of transfer of ownership to an individual, there are no tax consequences. Deferral of payment does not constitute a materiel.

After the redemption of shares or shares and their subsequent sale, the employee will receive income in the form of the difference between revenue and expenses incurred. If the assets were acquired at the expense of the received loan, interest on it can also be included in the expenses. Only if the interest is less than the limit values \u200b\u200bestablished in the Tax Code of the Russian Federation, will there be a material benefit subject to personal income tax ().

Suspensive conditions may cause a civil dispute

If option programs use suspensive conditions such as achieving financial indicators and continued employment at the end of the program, they may be the subject of a civil dispute.

According to paragraph 1, at the time of the transaction, the top manager and the operator should not know whether or not the circumstance included in the transaction as a condition will occur in the future. The difficulty is that one way or another all the suspensive conditions used indirectly depend on the will of the parties. At the same time, the existing arbitrage practice pretty controversial.

Thus, some courts believe that suspensive conditions should in no way depend on the will of the parties (decisions of the federal arbitration courts of the North Caucasus of 07.10.03 No. F08-3832 / 2003 and the Urals of 26.11.07 No. F09-8706 / 07-C4 districts ). Others point out that the main thing is that the participants in the transaction do not know whether the action will be committed in the future or not (decisions of the Presidium of the Supreme Arbitration Court of the Russian Federation of December 22, 1998 No. 936/97, Federal arbitration court Moscow District dated October 18, 2006 No. KG-A41 / 10103-06).

In addition, it appears quite risky to collateralize an employee's obligations under a share repurchase agreement or an interest in a restricted program. The legislation requires that the term for the performance of the secured obligation () be indicated in the pledge agreement. But obligations from the contract of repurchase and sale arise only upon the occurrence of suspensive conditions. In this regard, the pledge agreement may be recognized as not concluded.