Directors at the struggling IT recruiter Glotel are urging employees to join them in a scheme which means they partially forfeit their salaries in return for shares in the company.

Glotel is offering one share in the company for every £1 of annual salary sacrificed.

The board's aggregate salaries have been cut by 60% under the scheme and will generate savings of £600,000.

The options will be granted at an exercise price per share equal to their value at the close of trading today.

Shares in the company are currently worth around 39p – meaning the shares would have to more than double in value for participants in the scheme to recoup their lost earnings.

These so-called ‘founder options’ may be exercised during a two-year window ending on 31 January 2005, and the options lapse if the holder leaves the company.

In a bleak statement, the company said there was little sign of a recovery in the short term, but hoped the scheme would give incentives to staff.

Chairman Les Clark said: ‘Staff loyalty and morale are critical to our business and I would like to thank the staff who participate in our salary sacrifice scheme for their support.’