MUFG Pension & Market Services
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EPS Insight: Broad-Based Employee Share Plans in Australia 

14 February 2020 / Equity Plan Solutions

Welcome to the third edition of EPS Insight.

This report contains insights on plan trends, design, offers, post vesting activity and employee engagement, and covers all tax exempt and salary sacrifice plans offered by Link Group clients in 2019. We also share insights from our UK share plan team and talk to George Ross at The Star Entertainment Group regarding their employee share plans.

Throughout this report we refer to tax exempt plans and $5,000 share purchase plans, the most popular broad-based share plans in Australia:

Tax exempt plans: those plans meeting the requirements of section 83A-35 of the Income Tax Assessment Act 1997 (Cth) (the Act), and can be divided into ‘opt in’ (where employees must explicitly accept an offer of shares) and ‘opt out’ (where employees are given shares and can choose not to accept them).

Tax exempt plans can also be offered as a ‘gift’ (for nil consideration) or on a salary sacrifice basis $5,000 share purchase plans: plans that meet the requirements of 83A-105(4) of the Act. These plans are typically offered on an opt-in basis and employees are invited to purchase shares at full value using pre-tax funds.

Key takeaways

  • 9% of participants sold their shares within 30 days of the release date compared to 4% in 2016
  • 65% of employees are still in the plan at the 3 year restriction period
  • 70% of our ASX 200 companies have a tax exempt share plan compared to 75% in 2016 trends

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