So-called VSOPs, i.e. virtual shares, have the advantage that they are less complex than ESOPs. In order for employees to actually benefit from it, a few things have to be taken into account, explain ESOP experts Christopher Hahn and Kolja Czudnochowski (from left). Collage: Dominik Schmitt with photo from ESOP Direkt
The authors, Kolja Czudnochowski and Christopher Hahn, deal with the entrepreneurial, corporate law and tax law opportunities and challenges of employee participation. Together they also founded a company that supports startups and SMEs in their implementation. In the future, they will explain various aspects of ESOPs and VSOPs on Gründerszene.
Today: What do founders and employees have to consider in order to negotiate fair ESOP and VSOP regulations?
Employee participation has not only become an integral part of a contemporary corporate culture, but is now almost indispensable for retaining managers to the company – or winning them over to the company. Even if in the startup scene it is usually a flat rate of ESOPs (Employee Stock Option Plan) In most cases, employees and managers talk about one another Virtual Stock Option Plan (VSOP), i.e. a virtual participation program. This in turn means that they will receive a payment from the company upon exit.
Virtual shares have become established in practice primarily because the transfer of real shares is time-consuming and complicated. On the one hand, this applies above all for tax reasons – even the innovations brought about by the Future Financing Act do not eliminate all the difficulties here. But especially because every transfer of real business shares still requires going to a notary.
Especially with virtual shares, it is important to understand how the mechanism works. Ignorance can quickly lead to disappointment. However, the following statements also apply mutatis mutandis to real shares within the framework of an ESOP.
Finally new options for ESOPs – everything you need to know