Equity Incentive Plan Template for Singapore

An Equity Incentive Plan lets companies reward employees with shares or stock options in addition to their regular salary. These plans help Singapore businesses attract top talent and keep valuable team members motivated by giving them a stake in the company's success.

Under Singapore's Companies Act and Securities and Futures Act guidelines, these plans can include share options, restricted stock units (RSUs), or performance shares. They typically come with specific vesting periods and performance targets, making them powerful tools for long-term employee retention while aligning staff interests with company growth.

Consider implementing an Equity Incentive Plan when your Singapore company needs to attract and retain key talent, especially in competitive industries like tech and finance. This strategy works particularly well for startups and growth-stage companies that need to conserve cash while still offering compelling compensation packages.

The plan becomes essential during crucial business phases: when preparing for fundraising rounds, planning an IPO, or expanding into new markets. It's also valuable when facing high employee turnover or competing with larger firms for talent. Under MAS guidelines, these plans help create long-term alignment between employee and company interests.

• Stock Options: Traditional option plans letting employees buy company shares at a fixed price after a vesting period
• Restricted Share Units (RSUs): Awards actual shares over time, commonly used by established Singapore companies
• Performance Share Plans: Links share awards to specific company or individual performance targets
• Share Purchase Plans: Allows employees to buy company shares at a discount, often through salary deductions
• Phantom Equity Plans: Provides cash bonuses tied to share value without transferring actual equity, popular among private companies

• Board of Directors: Approves and oversees the Equity Incentive Plan structure, setting overall allocation limits and terms
• HR Department: Manages plan administration, tracks vesting schedules, and handles employee communications
• Legal Counsel: Drafts plan documents, ensures compliance with MAS regulations and SGX listing rules
• Participating Employees: Receive and exercise equity awards according to vesting schedules and performance conditions
• Company Secretary: Maintains share registers, handles regulatory filings, and coordinates shareholder approvals

• Company Details: Gather corporate structure information, share capital details, and existing shareholding patterns
• Plan Parameters: Determine total shares available, vesting schedules, exercise prices, and performance conditions
• Eligibility Criteria: Define who can participate and any specific role-based allocation guidelines
• Regulatory Compliance: Review MAS guidelines, SGX listing rules, and tax implications for equity-based compensation
• Board Approval: Prepare board resolutions and shareholder documentation for plan authorization

• Plan Objectives: Clear statement of purpose and scope of the equity incentive program
• Eligibility Terms: Detailed criteria for participation and allocation guidelines
• Award Structure: Specific types of equity awards, vesting schedules, and exercise conditions
• Administration Rules: Powers and duties of plan administrators, amendment procedures
• Performance Metrics: Measurable targets linked to award vesting or exercise rights
• Termination Provisions: Rules for handling awards upon employment cessation or company changes
• Tax Implications: Treatment of tax obligations for both company and participants

An Equity Incentive Plan differs significantly from a Stock Option Plan in several key aspects, though both are tools for employee compensation in Singapore. While a Stock Option Plan focuses specifically on share options, an Equity Incentive Plan offers broader flexibility in how companies can reward employees.

• Scope of Awards: Equity Incentive Plans can include multiple types of equity awards (RSUs, performance shares, stock options) while Stock Option Plans are limited to options only
• Flexibility: Equity Incentive Plans allow companies to adjust award types and terms based on employee level and performance goals
• Administrative Structure: Equity Incentive Plans typically require more complex administration due to various award types and vesting conditions
• Regulatory Requirements: Stock Option Plans face simpler compliance requirements under MAS guidelines, while Equity Incentive Plans need more comprehensive documentation