Shares are becoming the pay rise employers can’t fund in cash

New Zealand employers have found a way to give staff something valuable without blowing out the wage bill. They are handing over equity.

New Sharesies-commissioned YouGov research shows nearly a third of surveyed employers now offer an employee share scheme as part of overall remuneration, and a further 58 percent are looking at or considering one within three years. That is not a niche perk for Silicon Valley wannabes. It is mainstream remuneration strategy, adopted by firms that need to hold on to good people while cash stays tight.

Salary alone is no longer the deal

Sharesies Business general manager Susannah Batley frames it as a cultural shift. “Traditionally in New Zealand, remuneration has been predominantly about salary, but increasingly employers are recognising the chance to give their people a stake in the businesses that frankly they’re helping to build,” she told RNZ. She credits KiwiSaver’s maturation for making ordinary workers more comfortable with owning assets, and points to Australia, where longer-established superannuation has made share schemes more common.

The more telling numbers sit underneath. Of firms already running a scheme, 98 percent are reviewing participation and eligibility, which signals a move from executive-only arrangements to broad-based ownership. And 43 percent rate financial wellbeing as the joint top benefit, alongside staff attraction. Read that plainly: employers know their people are financially stretched, and equity is one lever they can still pull.

Workers want wealth their pay packet can’t build

The employee side of the ledger explains why the offer lands. An earlier Sharesies/YouGov survey found 56 percent of workers say their take-home pay is not enough to both cover bills and build long-term wealth. Eighty percent would consider taking at least part of their pay in shares.

That is the gap share schemes are filling. Not a bonus on top of adequate wages, but a route to ownership that wages alone are failing to provide.

There is a catch. Nearly two-thirds of those workers admit they do not understand how share schemes actually work. Uptake is also skewed by age, with 18 percent of Gen Z having already received shares in a recent pay rise, against 7 percent of millennials and 3 percent of Gen X and Boomers. Employers rolling out schemes to a broad workforce will need to explain them properly, or risk staff valuing the shares at nothing.

Turners shows it works at scale

For anyone who thinks share schemes only suit cash-poor start-ups, Turners Automotive Group is the counterpoint. More than 65 percent of its 700-plus staff are now shareholders in the NZX50-listed company, up from 53 percent in FY2025. The structure is simple: $1,000 of company-funded shares, plus an interest-free loan for another $1,000, repaid over three years before vesting, with dividends flowing throughout.

It is cheap to run, easy to understand, and it gives frontline staff a direct interest in the share price. That is alignment most boards would pay considerably more than $1,000 a head to achieve.

Tax settings still blunt the tool

The government has nudged things along. Treasury’s 2025 Growth Budget paper explicitly said share schemes help companies reduce the amount of cash salary they pay, and introduced a regime from 1 April 2026 deferring the taxing point for unlisted-company schemes until a liquidity event. Inland Revenue issued guidance in 2025 clarifying PAYE treatment and removing the ACC earner levy from share-settled benefits.

Useful, but modest. In a March 2025 submission, PwC and the Angel Association said New Zealand’s roughly 39 percent effective tax rate on scheme income was much higher than other comparable countries. Australia offers a 50 percent capital gains discount for start-up schemes, the UK exempts gains under £100,000, and long-held US shares can be taxed at 15 percent. The same submission argued the deferral regime does not present a particularly attractive option for start-ups.

This is not a new complaint. In 2024, Deloitte tax specialists described share schemes as golden handcuffs that let cash-strapped firms compete on equity, while noting New Zealand gave employees little tax reason to prefer shares over cash. Later that year, BusinessDesk’s Peter Griffin reported the tech workforce had shrunk 0.8 percent to 59,774 FTEs in the year to June 2024, as globally mobile workers weighed better offers offshore.

Share schemes have long tracked labour market pressure. Back in January 2023, with unemployment at 3.3 percent, NBR was already noting uptake rising in a tight labour market. The difference now is that the pressure is coming from margins, not a shortage of bodies.

Ownership is the competitive edge worth backing

For business owners, the message is straightforward. If you cannot match a rival’s salary, a well-designed share scheme is a credible alternative, provided you explain it and keep it simple. Turners has shown the template.

For the government, the message is sharper. Employers are already doing the work of turning staff into owners. A tax regime that treats that ownership no more kindly than a pay cheque leaves a proven retention tool half-built. Matching Australia would be a cheap way to keep talent, and capital, on this side of the Tasman.

Sources

• RNZ: Employers showing more interest in offering a slice of company to workers – survey (2026-10-28)
• RNZ: Workers open to company share schemes, but many lack knowledge (2026-07-07)
• BusinessDesk: Contact Energy, Turners: Sharesies sees employee share scheme demand surge (2026-07-13)
• Treasury: Cabinet Paper CAB-25-SUB-0126 Budget 2025 Package – The Growth Budget (2025-09)
• Inland Revenue: Employee share schemes – Employer obligations and tax treatment (2024-06-17)
• PwC and Angel Association: Submission on employee share scheme timing issues (2025-03)
• Deloitte: Inland Revenue’s ESS U-turn (2024-03)
• BusinessDesk: A sweeter deal needed to attract top tech talent (2024-12-04)