![]() ![]() Generally, the longer the exercise window is open for ex-employees, the better: it’s fair to try and give people time to weigh up a complex financial decision amid what can be a stressful and emotional process. The duration of the ‘exercise window’ – the period of time when employees need to decide whether or not to convert their share options into shares – is an important consideration for companies. Then, employees leaving the business should be given the opportunity to exercise their share options and turn them into shares. Usually, employees that are made redundant are treated as ‘good leavers’, as their exit is through no fault of their own. ‘Good leavers’ keep hold of the vested portion of their equity stakes when they leave, while ‘bad leavers’ lose all rights to their shares and options. ![]() But there are general guidelines that most companies follow to a greater or lesser extent when it comes to people’s shares and share options.Įach employee departing the company is deemed either a ‘good leaver’ or a ‘bad leaver’. It’s important to remember that there is still very little standardisation across companies when it comes to employee equity: every business handles its equity plan slightly differently. So how should companies approach offboarding people who own shares and options in the business?Įmployee equity during the offboarding process So with more companies now offering equity to employees, equity is another consideration for HR and people teams to bear in mind when navigating layoffs. HMRC figures suggest that the number of UK equity schemes increased by 6% in 2021. If redundancies are badly handled, there can be many negative ripple effects, including damage to the engagement and motivation of the remaining team members. It goes without saying that companies need to deal with layoffs sensitively. In the tech industry, hundreds of tech companies have together offboarded more than 200,000 employees in 2023, according to one tracker. The tech sector has not had an easy time so far this year when it comes to redundancies. ![]()
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