ESPP in listed companies - what to keep in mind

A majority of listed companies in Norway have some form of share-based incentive program for their employees. A common variant is a program in which the company's employees are offered to purchase shares in the company at a discounted price, possibly in combination with the allocation of a "free" bonus share if the employee remains employed by the company and the shares are not sold during a specific period. Such general share programs are often referred to as ESPP (Employee Share Purchase Programs). The main purpose of ESPP is to contribute to positive value creation by increasing engagement internally, attracting and retaining employees, and giving employees the opportunity to take part in the company's value creation and growth.

An ESPP program differs from those often offered to the company's management and key employees (usually referred to as LTI (long term incentive programs)). The LTI programs are often option-based, tailored to the individual company and linked to the achievement of specific performance targets that are relevant to the business.

Below we provide you with a summary of some of the factors to bear in mind when establishing and implementing ESPPs in listed companies.

Preparations: When establishing and implementing ESPP in listed companies, several actors in the company will be involved, including the CFO, the board of directors, HR and the head of IR. In addition, external parties such as lawyers, auditors, accountants, the Register of Business Enterprises and possibly suppliers of relevant IT platforms that offer ESPP services will often be involved in the process. Listed companies are also subject to special obligations under the Norwegian Securities Trading Act, the EU Market Abuse Regulation (MAR) and the stock exchange's own regulations. In our experience, the number of players involved and the complex regulations listed companies are subject to mean that ESPPs should be carefully planned and well prepared to ensure the best possible implementation.

In the preparation phase, we recommend listed companies to:

  • Start preparations well in advance of the planned implementation.
  • Involve external advisors as early as possible who can assist with or provide input on the points below.
  • Set up an overview with planned steps, dates and a clear division of responsibilities.
  • Conduct necessary investigations into practical matters, including:
    • Obligations under MAR (see further information below).
    • Desired framework and conditions for ESPP.
    • Whether the company has shares available for settlement, or whether there is sufficient board authorization for the issuance of new shares or for the acquisition of treasury shares if treasury shares are to be repurchased for settlement.
    • o Procedures that ensure efficient payments from the employees and that the shares can be delivered to the employee's VPS account, especially for companies that have employees in many countries outside of Norway.
    • Current guidelines for salary and remuneration to senior executives.

Documentation: In connection with the ESPP, there are several documents that need to be prepared. These documents will often be subject to several adjustments before final versions are ready. We therefore recommend that listed companies take this into account in the timetable for the implementation of the ESPP. Examples of documentation prepared in connection with the ESPP are:

  • ESPP - Terms and Conditions and Application Agreement.
  • Presentation to employees.
  • Corporate documents - resolutions of the Board of Directors, subscription forms and articles of association.
  • Stock exchange announcements, and primary insider notifications.  

Information for employees: It is important that employees are adequately informed about the ESPP and procedures for participating in the program. Such information is often provided by the management of the company holding a presentation to the employees. In order to receive the shares, the employees must have a VPS account or nominee account. The process of establishing a VPS account/nominee account can take some time, and we therefore recommend that listed companies provide employees with special information about this requirement and, if relevant, procedure for establishing such account. Furthermore, listed companies should ensure that the presentation to their employees does not contain advice or recommendation to purchase shares, and that the presentation provides sufficient information about the risks associated with the shares.

Particularly concering the implementation of ESPP and MAR: Listed companies are subject to the obligations under MAR and should note that in connection with the implementation of ESPP, certain issues or assessments may arise that must be undertaken, including:

  • Inside information may prevent the company from conducting ESPP if such conduct violates the prohibition of insider dealing or the prohibition of recommending insider dealing.  
  • Closed periods for primary insiders should be taken into account when choosing the timeline for ESPP implementation so that primary insiders can also participate.
  • Handling of the duty to notify transactions of primary insiders and close associates.


AGP is a law firm specialized in transactions, capital markets and corporate. Ongoing assistance to listed companies is part of our core competence.  

If you have any questions about ESPP or other incentive programs in listed companies, please contact:

Contact us

Hilde Gavel Bakke


Lars André Gjerdrum