Breaking News Brown to be Club Shareholder - Innovative deal looms

[Napster]

Im sure his share certificate will have his name written over a very faint crossed out Tara Brady's.

 

[Jam_Man]

Practices such as these are common, especially in Financial Services. Typically it is the variable compensation such as bonuses that are deferred as shares, normally vesting over a staggered period of typically around three years. The aim is to promote loyalty and long term practices, rather than risky short term strategies whereby people can disappear into the sunset and leave everyone else to pick up the pieces. Also, shares can be an option to give staff as there is a shortage of cash to pay people large ad hoc payments, I'd imagine this is more likely to be the case with Ron!

All fine if you shares are on the market and have tangible value, ours aren't and don't.

 

[Benfleet A1]

I wonder if a take over is being discussed that Ron and Phil Brown are privy to. Just me thinking out loud. Barking up the wrong tree?

 

[RHB]

I wonder if a take over is being discussed that Ron and Phil Brown are privy to. Just me thinking out loud. Barking up the wrong tree?

Under cover conspiracy under way eh? That could extend the life of this thread.

 

[BoyWonder2]

To be honest, I'd just wish he'd sign the bloody thing, shares or not.

Don't forget, he was "set to sign his deal" back before the Luton away match in October...

 

[Fish]

There is no where near enough detail in the press release for anyone to have any idea of how this would actually work in practice -- and frankly why should there be -- glad to see that hasn't stopped pages of speculation and opinion though so I will add my own :smile:

• Ron gives the shares to Phil-- these are/were Ron's personal shares
• Ron/Phil agree upfront various forward values on the shares based on a number of targets - league position etc etc
• The price agreed has no relevance to other share holders as it is Ron buying them back- not the company
• I work for a publicly quoted firm and getting shares is normal to me. However that is very different as the shares are publicly quoted, and I get them from my firm, The bit that makes no sense to me is that the wording is stating that Ron is paying press Phil, not SUFC. That seems 'weird' to put it mildly

If the buy-back price was to have been agreed at the beginning of the deal, subject to performance measures, what would be the difference between Phil being a shareholder and simply having a cash bonus? Makes no sense! There's no added benefit of Phil being a shareholder if he's automatically selling his shares back if/when he leaves. There are no dividends to be had in the mean time, he can't sell them on. Only if he's using the shares as collateral to buy a house or something could this make sense - and may explain why he;'s selling them back at the end of his stay. He's got no longer term stake in the club than his contract - and being a full-time employee makes him more of a stakeholder in the club than owning shares.

 

[Benfleet A1]

Under cover conspiracy under way eh? That could extend the life of this thread.

As I said, thinking out loud, nothing more than that.

 

[united we stand]

If the buy-back price was to have been agreed at the beginning of the deal, subject to performance measures, what would be the difference between Phil being a shareholder and simply having a cash bonus? Makes no sense! There's no added benefit of Phil being a shareholder if he's automatically selling his shares back if/when he leaves. There are no dividends to be had in the mean time, he can't sell them on. Only if he's using the shares as collateral to buy a house or something could this make sense - and may explain why he;'s selling them back at the end of his stay. He's got no longer term stake in the club than his contract - and being a full-time employee makes him more of a stakeholder in the club than owning shares.

I gt all of that , but if the price is not agreed up front then the below statement is meaningless, inaccurate and misleading
Phil will be able to cash the shares in and sell them to me when he leaves the football club and the better he does the more money he will get back.”

The difference between the above and a cash bonus is that the shares are coming from Ron, not the club (according to the article) There may also be tax implications for Ron (positive implications) in structuring the deal this way. The accountants on here may have an opinion . I can't really see anyone using collateral as a loan (At work we looked into firms using equities as collateral and decided against it for a variety of reasons , but we would not have offered any more that 50% of closing price for European Listed Equities vs vs Government bonds where we offer up to 97%)

its all speculation though, as I started with we don't really have enough info and this is only remotely interesting because we don't have any football to talk about :smile:

 

[Amwell Blue]

If Phil is going to be a shareholder, does that mean that the shareholders get a go at being the Manager?

 

[fbm]

If the buy-back price was to have been agreed at the beginning of the deal, subject to performance measures, what would be the difference between Phil being a shareholder and simply having a cash bonus? Makes no sense! There's no added benefit of Phil being a shareholder if he's automatically selling his shares back if/when he leaves. There are no dividends to be had in the mean time, he can't sell them on. Only if he's using the shares as collateral to buy a house or something could this make sense - and may explain why he;'s selling them back at the end of his stay. He's got no longer term stake in the club than his contract - and being a full-time employee makes him more of a stakeholder in the club than owning shares.

Tax treatment.

If he gets a bonus it would be subject to income tax @ 40%.

That wouldn't be the case if it was a share price increase which, subject to the type of share, may even be CGT free as well.