A listed corporate client faced an interesting challenge. 

Its senior management, who owned a significant stake of the business, needed to increase their BEE ownership and reconsider their existing share incentive schemes for the executives due to prior efficiencies. 

The share incentive scheme in place, which was in the form of share options granted to senior executives, gave rise to both large annual income statement charges as well as significant income tax implications for the recipient. 

The latter problem was extubated by the tax being triggered before in the liquidity event, thereby forcing some of the executors to sell portions of their shares in order to fund the tax payable. 

We were able to model the financial and accounting consequences for both the company and the executors for a number of potential alternative share- price scenarios, all of which proved to be more favourable. 

We designed a solution that materially reduced the income statement charge while simultaneously reducing the tax payable by the executors. 

This was achieved while increasing the ability of the share incentive scheme to obtain and reward high-performing executors.