What you should know about employee share plans

The Bottom Line PodcastLegalHuman Resources
Written By Alexander Spencer

Darren Sommers is the Founder of Adventum Legal. Adventum Legal is a boutique law firm specialising in the intersection of law, investment, and innovation to provide solutions to complex problems across technology, commercial, and corporate law.

In this episode, Darren explains how he works with tech companies that utilise employee share plans to attract and retain talent and why you might want to consider them as part of your strategic growth plan. He also dives into common legal pitfalls to avoid, how to prepare for employee departures with clearly defined parameters for "good leavers" and "bad leavers" when considering share plans, and how to ensure these plans are effectively implemented from the outset to prevent potential confusion or conflict in the future.

Key lessons from the podcast

  • Employee Share Plans Can Be a Strategic Talent Tool
    Used effectively, share plans help tech companies attract, motivate, and retain key employees by offering them a stake in the business’s success.

  • Structure Matters—From the Start
    Poorly designed or vague share plans can lead to legal disputes or employee dissatisfaction. It's critical to set up a plan with clear terms and legal backing from the outset.

  • Define “Good Leavers” vs “Bad Leavers” Clearly
    One of the most common pitfalls is not clearly outlining what happens when employees leave. Establishing rules around vesting and share treatment based on exit type helps prevent future conflict.

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