Challenging market conditions combined with the prospect of a 50 per cent rate of tax for high earners are leading many companies to review their share incentives schemes for senior executives. In these circumstances, joint share ownership plans (JSOPs) might be worth consideration.

JSOPs allow executives to participate in the growth in value of a company's shares and enjoy a capital return taxable at only 18 per cent. Under a JSOP, an employee and an employee trust both acquire a beneficial interest in shares albeit on an unequal basis. The trust buys most of the initial value of the shares and the employee only a small fraction. The trust, however, has only a limited right to growth in the value of the shares (perhaps up to a hurdle rate of five per cent per annum) and the employee is entitled to all the growth above any hurdle rate. Entitlement can be linked to performance targets and forfeited in the case of leavers.

JSOPs won't, of course, be suitable for all companies - they are generally more complex than conventional share schemes, generate no corporation tax deduction and will require expert valuation advice. On the positive side, they establish a direct link between executive rewards and long-term capital growth, there is no income tax or NICs and no upper limit on the value of the award, all of which are attractive benefits.