Thursday, May 28th, 2009 - MPR Group
The Budget changes to employee share scheme rules will greatly reduce the ability for start-ups to attract management talent, a key strategy to their growth according to a respected accounting and advisory firm.

Marc Peskett, partner of Melbourne based MPR Group, says start-ups and high-growth companies in the unlisted sector rely on shares or options being offered instead of, or included in a reduced salary package, to attract expert management to help them grow during a period when cash flow can be particularly tight.

“Under the new regime, start-ups will now find it increasingly difficult to attract the necessary talent in key areas, as their traditional ‘sweat equity’ advantage is no longer as attractive,” Mr Peskett says.

“While the move is primarily designed to reap hundreds-of-millions of dollars from the established companies who provide share schemes as a benefit to their top executives, it is those in the unlisted company sector that will suffer the most.

“This is the space where Australia’s next generation of business and innovation is incubating and share schemes are the single most effective instrument we have to attract and retain quality talent to start-ups.”

Mr Peskett says the unlisted companies sector makes up 43 percent of Australia’s GDP and is a substantial contributor to the economy in terms of both finance and employment.

“This is yet another example of policy made without its impact on employee share scheme rules being properly understood,” Mr Peskett says.

“Surely as a clever country we should be aiming to provide both start-ups and those that are willing to give their expertise and time for a share of potential growth all the assistance they can get.

“Taxing Australia’s top executives who use employee share options to pay less rather than the highest personal income tax rate, should not impinge on our next crop of successful Australian businesses.”

ENDS

Marc Peskett can be contacted for comment on 03 9869 5900.

For all media enquiries contact Bruce Nelson on 0423 403 449.

Contact Profile

Bruce Nelson

P: 0423 403 449
M: 0423 403 449
W: www.mpr-group.com/

Keywords

The Budget changes to employee share scheme rules will greatly reduce the ability for start-ups to attract management talent, a key strategy to their growth according to a respected accounting and advisory firm.

Sharing

More Formats