Podcast: Episode 2 - International share schemes and equity incentives
Host Jonty Bloom, is joined by Emily Villatte, CFO of Acast, Veronika Lipinksa, Senior Tax Manager, BDO, David Ogden, Director, BDO and Jamie Carter, Partner, BDO to discuss the implications of International share schemes and equity incentives
Speaker: Emily Villatte, CFO of Acast
Speaker: Veronika Lipinksa, Senior Tax Manager, BDO
Veronika specialises in designing and implementing HMRC approved share plans, such as EMI.
Speaker: David Ogden, Director, BDO.
David has over 20 years experience of all aspects of employee share plans.
Speaker: Jamie Carter, Partner, BDO.
Jamie is a Partner in the London Business Outsourcing team.
What is the rationale for a share scheme?
David Ogden explained that we are talking largely about shares and options for employees in companies, primarily about tech companies. Typically, when a company starts up it often has very little money, and certainly not enough money for employee incentives. Therefore, people are often rewarded, retained and incentivised by giving them shares and options. The benefit of this is that if you have shares (options in the company) then you feel more part of it.
What’re the implications of a tech company with people working everywhere in setting up a share scheme?
Veronika Lipinska explains what companies which operate share plans in the UK do when they expand and when they go abroad. Acast who are a great example of this: they’re a fast growing tech company and when they expand they can either take the share plan which they have at home, and they can roll it out on a one to one basis to employees in other jurisdictions, or they can take their existing plan and wrap it in a tax wrapper appropriate for the jurisdiction where the employees are based. So different jurisdictions offer different opportunities.
Jamie Carter gives insight from an accounting perspective; stating that a lot of the businesses that he deals with are high growth, dynamic businesses and are laser focused on growth. He explains that the reason they come to him is to help navigate that path to growth. It might also be that finance isn’t always the first thing on their agenda. Therefore, a lot of the time he notices that a business that comes his way, the issue might just be that they have overlooked the fact that they’ve got a share scheme at all. Not wilfully but simply that there may have initially been no cash transaction. With this not being crystalised, they’ve not made the account adjustments that are needed and that is something that the business must deal with.
How did Emily Villatte, CFO of Acast, who started in Sweden, roll out to the UK and then internationally?
Acast are a tech company, they help podcast creators grow their audience monetize their shows and were founded in Stockholm in 2014. Emily Villatte tells us that they’ve seen rapid growth across the globe. Acast have been through the journey of being VC-backed, gaining traction with institutional investors and they recently listed the business.
There have been quite significant changes to their capital structure and they’ve tried to align their warrant and share schemes to their journey. When Emily started at Acast in 2019, the business was in the middle of their expansion, so they had their Swedish warrant plan at that time. They were looking to expanding this into the UK, and then in quite rapid succession into the US, Australia, France, Germany and a couple of other markets.
When they were adding these locations, the considerations that were just noted resonate with Emily. The team had to wrap their heads around the tax, accounting, IFRS, warrant valuation implications, local GAAP, tax valuation. Emily explains how they worked through all of these points, and it became clear that they definitely needed external support.
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