Online fashion giant Boohoo has given qualifying employees shares in the company encouraging all staff to become shareholders.
CEO John Lyttle has told BusinessLive its share incentive plan is “positive for morale and productivity” among its employees.
The Manchester-based retailer revealed 2,343 employees were eligible for its 2019 share incentive plan and were awarded 884 free ordinary shares each on August 23, which represents around £2,000 at the purchase price.
The free shares are subject to a three year forfeiture period, the group explained.
Mr Lyttle said: “At boohoo we pride ourselves on our inclusive culture which is guided by values of passion, agility, creativity and, above all, team spirit.
“It is a credit to each and every one of our employees that boohoo is where it is today, a fast-growing international business.
“For some time now we have been committed to encouraging all boohoo employees to become shareholders.”
“It is fundamental to our success that we have an engaged workforce.”
Boohoo said it has granted more than two million ordinary shares of one pence each to its employees as part of a commitment to encourage its employees to be shareholders.
Mr Lyttle continued: “As the business continues along its growth trajectory, all our employee-shareholders can collectively share in the benefits of boohoo’s success.
“Ultimately, our employees represent an integral part of the business and are a driving force behind our growth, something we feel is well worth rewarding.”
Jo Cresswell, community expert at job and recruiting site Glassdoor, said share incentive plans are a “popular and effective way” for firms to reward employees to help staff retention.
She said: “Monetary incentives like share incentive plans are important for employees to feel their individual contributions are valued and give them the opportunity to share the successes of the business.
“With share incentive plans, if the business has a good year then employees get rewarded and if the business doesn’t have a good year, then employee rewards may be lessened.
However, she added: “Glassdoor research demonstrates that compensation and benefits are one of the least important factors of workplace satisfaction.
“In order to really engage their workforce, businesses should focus on their culture and values and the quality of their senior leadership.”
Lee Biggins, founder and CEO of job board CV-Library said Boohoo’s move was “a smart one”, with companies now under pressure to consider new ways to incentivise employees.
He said: “Aside from it being a tax-efficient way to reward staff, there are a number of other benefits to employee share schemes and we only need to look at leading retailers like John Lewis to see that businesses who enable employees to share in the profits of their business are always going to be seen as top companies to work for.”
“Naturally not every employer can offer such incentives; personally, this isn’t something I would consider for my company at this time.
“But never say never; it’s a great way to attract new employees and keep existing members of staff motivated and invested in your business, particularly if your company is performing well and you have massive growth plans.”
