ESOPs ‘definitely’ increasingly appealing for in-house lawyers
Against the backdrop of the supposed Great Resignation, employee share/stock ownership plans are becoming a more talking point for existing and aspiring corporate counsel, says one GC.
In conversation with Lawyers Weekly on The Corporate Counsel Show, Linktree general counsel Rosanna Biggs (pictured) said that employee share/stock ownership plans, or ESOPs, are “definitely picking up steam” in the formulation of enticing benefits packages for employees in businesses, including in-house counsel.
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
Such plans, Ms Biggs said — which see employees own part of the company that they work for, thereby giving them a vested interest in that business by way of equity — allow professionals to “have an interest in the company that they’re working for beyond the monthly salary”. They also help businesses attract top talent and then retain that talent, she noted.
Entering into an ESOP as part of one’s employment package, she reflected, is “probably not a super natural fit” for lawyers who, by nature, tend to err on the conservative side of the risk spectrum and are more accustomed to having their compensation be based on the results and success of the business.
However, she outlined, the availability and undertaking of such plans can be a “really positive reminder” that in-house lawyers are, ultimately, there to help a business succeed and that the results of that business “should be directly tied” to the goals of the law department.
“And so, having a scheme like ESOP there to make sure that the right behaviours are being driven, and that in-house lawyers are really focused on the business metrics will, from a personal perspective, support those focuses for the offering of legal advice and the role that one plays as counsel,” she explained.
When asked if there is an increasing number of corporate counsel, or those aspiring to such roles, talking about such schemes, Ms Biggs said that this is “definitely” the case for those looking to move in-house.
“I know a lot of colleagues who’ve, similar to me, made that switch from private practice to in-house and have had that as a big consideration,” she mused.
“Obviously, the amount of equity that you might be granted when you make that move will really depend on the size of the business that you’re joining, and your role within that business.
“It’s traditionally been reserved for the just the most senior executives, but it is becoming more common that those in other roles will also have the opportunity to receive equity too — but the amount is likely to be very much tied to the role that you have within the business.”
Looking ahead, Ms Biggs proclaimed, she is excited to see more ESOPs that “really embed” the principles that all professionals should be working towards, “but also to give people personal benefit in growing companies and see that upside”.
There is likely, she went on, a “strong correlation” between having an ESOP in place and employees, including those in the law department, remaining with that employer for a longer period of time, such that they can “actually realise that equity and see it grow over time”.
“Certainly, from the reaction that we had from our team when [Linktree] introduced our scheme was very positive. People had been asking for it for a long time, and they were happy when it arrived,” she recalled.
“Following that, the reception from candidates with whom we’ve been able to openly talk about ESOPs as part of their overall compensation has also been very positive.”
The full conversation with Rosanna Biggs will be aired on The Corporate Counsel Show tomorrow (3 August).