PRWeek TV: 'Don't give equity away cheaply', agency bosses warned

While PR businesses are 'ideally suited' to sharing equity with senior staff, agencies have been warned to think carefully before giving away shares.

In the studio with PRWeek TV, Rupert Ashe, director of advisory firm D5 Capital, commented: ‘Equity participation ideally suited for PR. Ultimately your company is your people. If they can perform to their greatest energies and bring in business, you’ll get a lot of bang for your buck by giving out equity to senior people.’

However, he added: ‘Don’t give it away cheaply - equity is a finite resource, once you’ve given it away then the only way you can get it back is if your staff leave.’

Ros Kindersley, MD of JFL Search and Selection, commented that equity sharing schemes are only beneficial in certain circumstances.

‘Equity is great, but only if it’s meaningful equity – in other words, if it is linked to a bonus or dividend scheme or if the company is getting ready for sale,’ she said.

She added that agencies should be also be careful which individuals they give equity to. ‘You don’t want to retain all your staff ad infinitum, having a bit of change is valuable at times,’ she said. ‘You don’t want to lock them into a golden coffin.’

Ashe agreed: ‘You don’t typically get huge returns from spraying your equity around to every level of staff,’ he said. ‘You want the equity in the hands of people who can behave like entrepreneurs and deliver results.’

Read more on how agencies are offering staff a share of equity

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