Effect of coronavirus on incentives packages

The economic and social turmoil that has resulted from the response to the Covid-19 pandemic has meant that many businesses have gone through an unprecedented period of rapid change. Many businesses are unrecognisable from those that embarked on 2020; a large number are now rebuilding or adjusting their focus and business model to deal with this.

One collateral impact of this process will be on employee incentive arrangements. Arrangements implemented in recent years that were well aligned to business strategy at the time are unlikely to remain so. Businesses can expect pressure to adjust their incentives packages to address this. While it will be the commercial dog which is driving it is important to note that there are a number of potential stings in the tax tail as well as some opportunities.

The commercial issues

There are a number of ways in which existing incentive arrangements could have...