Right to Acquire Share Financial Instrument – Incentives for startups and other businesses

The very idea of introducing of a new financial instrument issued by a limited liability company is to improve the economic environment as well as financial growth by providing a way for companies to incentivize employees, especially the ones in IT industry, thus enabling companies to operate in accordance with high standards adopted worldwide.

Considering that the companies within the IT industry and start-ups, in general, have the capacity to multiply their own value in the short term (developing a ‘viable product’) such undertakings usually lack the initial funds to pay adequate compensation and salaries so the additional incentives for employees are enabled creating the opportunity for them to become the shareholders of the company, and to participate in dividend distribution or to capitalize by selling the acquired shares with  a premium.

JPM Senior Associate Miloš Maksimović and Associate Luka Hajduković are providing extensive insight on this relatively new financial instrument, serving as an employee’s incentive mechanism as well as a start-up’s financial stimulator when lacking initial capital.

The full text of the article can be found HERE.

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