Our client, a family-owned business undertaking succession planning, sought to realign its ownership structure and reward key employees through the creation of growth shares. Through strategic share restructuring, our team worked closely with the client’s tax advisor to design and implement a tax-efficient legal framework that aligned shareholder interests and supported the company’s long-term growth objectives.
The company, a successful family-run enterprise was preparing for the next phase of its life cycle. Following tax advice, the two founding shareholders decided to transfer a majority stake of their shareholding into newly established family trusts, with their children as beneficiaries. This move was part of a broader succession and estate planning strategy.
However, the shareholders also recognised the importance of retaining and motivating their senior employees. They wanted to ensure that the team driving the business forward had a tangible stake in its future success, without diluting existing ownership or control prematurely whilst also providing a further element of security that their senior employees will drive the business forward once the founding shareholders inevitably take a step back from the business.
Why they chose Moore Barlow
The company was looking for a legal structure that could support two key goals: securing long-term family ownership and incentivising future growth. They had already received tax advice recommending the transfer of shares into family trusts, but needed a way to implement this in a manner that was both practical and future-focused.
At the same time, they wanted to introduce a mechanism that would reward employees for helping the business grow, but only if that growth translated into real value. The idea was to create a structure that encouraged entrepreneurial thinking among staff, without giving away existing equity or compromising control.
They approached us to help design and implement a solution that would balance these priorities, protecting legacy while enabling progress.
What Moore Barlow did
We worked with the company to develop a structure that aligned ownership succession with performance-based incentives. A key part of this was the introduction of growth shares – a class of shares that would only deliver value to employees if the company’s valuation exceeded a benchmarked valuation (set at 20% above the current valuation).
This approach allowed the company to:
- Reward genuine value creation, as employees would only benefit if they contributed to measurable growth.
- Protect existing shareholder value, as the hurdle ensured that current owners retained full benefit up to a certain point.
- Avoid unnecessary dilution, as growth shares didn’t interfere with control or existing equity.
- Create alignment, as employees were incentivised to think long-term and act in the company’s best interests.
The structure was designed to be clear, enforceable, and scalable – supporting both immediate goals and future flexibility.
What the outcome was
The restructure delivered a balanced solution that addressed both succession planning and employee engagement. By transferring a majority of shares into family trusts, the founding shareholders secured long-term ownership continuity and laid a path for future estate planning.
At the same time, the introduction of growth shares gave key employees a clear incentive to contribute to the company’s success. Because these shares only deliver value if the business exceeds a defined valuation threshold, they encourage a focus on sustainable growth and long-term performance.
The outcome was a structure that:
- Supported succession goals without disrupting day-to-day operations or control.
- Motivated employees by linking rewards directly to business performance.
- Improved retention and engagement, as staff could see a tangible benefit in helping the company grow.
- Preserved shareholder value, ensuring that existing equity was protected until new value was created.
- Aligned with tax advice, keeping the restructure efficient and compliant.
This approach helped the company move forward maintaining its family-owned identity while creating further opportunity for future growth.
If you would like further information on how we could adopt a similar plan for you, please do not hesitate to contact our Corporate Law team.
