advantages and disadvantages of giving land grant to officers instead of salary
Answers
advantages
motivating your employees to become more productive
aligning employees' interests with those of shareholders
recruiting new talent or retaining valuable employees
compensating for lower salaries and relieving pressure on cashflow
remunerating employees in a tax-efficient way
increasing loyalty and reducing staff turnover
raising working capital
realising owners' investment
DISADVANTAGES
The effect on morale and retention if the share price falls - particularly for share option schemes.
Administration costs - short-term costs of drawing up and getting a scheme approved, plus long-term costs of managing the scheme and keeping records.
Dilution of share ownership - as more shares are issued each share you own becomes a smaller percentage of the company - you could lose control of the business. You must retain 75 per cent of the voting shares if you want to continue taking all important company decisions.
Risks of arousing unrealistic expectations among employees of the financial rewards.
If employees eventually wish to sell their shares in an unlisted company (one without shares on a public stock exchange), you may need to run an internal market for the shares, perhaps through setting up an employee benefit trust.