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Are there any examples of a tiered stock ownership plan? Looking at options to expand stock options to Senior Associates and Associate levels. May consider setting certain levels for the amount of stock for each group or an option of voting versus non voting shares. Just beginning the discussion on this so looking for examples from other firms.

There are numerous examples of tiered stock structures, although depending on what State your business is domiciled, there might be limitations on what you can do.  For example, in most states, S Corporations can only have one tier of shares whereas C Corporations can have different tiers.  In some states, you can elect for an S Corporation to be a "closed corporation," which will provide you much more flexibility on voting and other governance rights.  (You need to check with a corporate attorney based on your specific state laws.)

Some firms bypass the extensive paperwork that accompanies bringing someone into the ownership fold by creating was is commonly referred to as "phantom stock" that is correlated to the price of a firm's actual stock.  Others create bonus systems that serve the same purpose as stock or stock options.  Lots of options but you need to start by defining your overall goals (rewarding performance, retaining key staff, recruiting future owners, facilitating succession planning, deferring taxes, etc.)

Be careful with stock options, as the IRS often takes a keen interest in how these are treated and could have significant tax and cash flow consequences to those receiving the options.

There are numerous examples of tiered stock structures, although depending on what State your business is domiciled, there might be limitations on what you can do.  For example, in most states, S Corporations can only have one tier of shares whereas C Corporations can have different tiers.  In some states, you can elect for an S Corporation to be a "closed corporation," which will provide you much more flexibility on voting and other governance rights.  (You need to check with a corporate attorney based on your specific state laws.)

Some firms bypass the extensive paperwork that accompanies bringing someone into the ownership fold by creating was is commonly referred to as "phantom stock" that is correlated to the price of a firm's actual stock.  Others create bonus systems that serve the same purpose as stock or stock options.  Lots of options but you need to start by defining your overall goals (rewarding performance, retaining key staff, recruiting future owners, facilitating succession planning, deferring taxes, etc.)

Be careful with stock options, as the IRS often takes a keen interest in how these are treated and could have significant tax and cash flow consequences to those receiving the options.

There are numerous examples of tiered stock structures, although depending on what State your business is domiciled, there might be limitations on what you can do.  For example, in most states, S Corporations can only have one tier of shares whereas C Corporations can have different tiers.  In some states, you can elect for an S Corporation to be a "closed corporation," which will provide you much more flexibility on voting and other governance rights.  (You need to check with a corporate attorney based on your specific state laws.)

Some firms bypass the extensive paperwork that accompanies bringing someone into the ownership fold by creating was is commonly referred to as "phantom stock" that is correlated to the price of a firm's actual stock.  Others create bonus systems that serve the same purpose as stock or stock options.  Lots of options but you need to start by defining your overall goals (rewarding performance, retaining key staff, recruiting future owners, facilitating succession planning, deferring taxes, etc.)

Be careful with stock options, as the IRS often takes a keen interest in how these are treated and could have significant tax and cash flow consequences to those receiving the options.

There are numerous examples of tiered stock structures, although depending on what State your business is domiciled, there might be limitations on what you can do.  For example, in most states, S Corporations can only have one tier of shares whereas C Corporations can have different tiers.  In some states, you can elect for an S Corporation to be a "closed corporation," which will provide you much more flexibility on voting and other governance rights.  (You need to check with a corporate attorney based on your specific state laws.)

Some firms bypass the extensive paperwork that accompanies bringing someone into the ownership fold by creating was is commonly referred to as "phantom stock" that is correlated to the price of a firm's actual stock.  Others create bonus systems that serve the same purpose as stock or stock options.  Lots of options but you need to start by defining your overall goals (rewarding performance, retaining key staff, recruiting future owners, facilitating succession planning, deferring taxes, etc.)

Be careful with stock options, as the IRS often takes a keen interest in how these are treated and could have significant tax and cash flow consequences to those receiving the options.

There are numerous examples of tiered stock structures, although depending on what State your business is domiciled, there might be limitations on what you can do.  For example, in most states, S Corporations can only have one tier of shares whereas C Corporations can have different tiers.  In some states, you can elect for an S Corporation to be a "closed corporation," which will provide you much more flexibility on voting and other governance rights.  (You need to check with a corporate attorney based on your specific state laws.)

Some firms bypass the extensive paperwork that accompanies bringing someone into the ownership fold by creating was is commonly referred to as "phantom stock" that is correlated to the price of a firm's actual stock.  Others create bonus systems that serve the same purpose as stock or stock options.  Lots of options but you need to start by defining your overall goals (rewarding performance, retaining key staff, recruiting future owners, facilitating succession planning, deferring taxes, etc.)

Be careful with stock options, as the IRS often takes a keen interest in how these are treated and could have significant tax and cash flow consequences to those receiving the options.

Our firm is owned by two groups of stockholders. 1) Those who purchase options granted to them on a discretionary basis (About 30% of our employee-owners participate in this program) 2/3 of the company stock is owned by this group. 2% are "major stockholders" and own approximately 1/3 of the company stock - all shares purchased through this program are voting shares. Because of its discretionary nature, this program does not fit the definition of an ESOP. 2) The other 1/3 of the stock is owned by our profit sharing program in which every employee participates (non-voting).

The Pro's of this structure as I see it, outweigh the cons. The company is now 65 years old and became employee owned in the 70's. One bit of advice when adopting a stock ownership program is to create a written succession policy. Our succession policy includes requiring principals and senior managers in our organization to continually identify a key subordinate(s) to fill their role and then developing them for the position. It also suggests principals and senior managers identify a retirement date and replacement two-years in advance.

There is also a bit of accounting that goes along with having employee owners. In our firm, if your shares are valued at more than $50,000 at retirement, you are paid in five equal annual disbursements after retirement. This requires developing cash reserves and cash-flow planning to make this happen.

Best,