We understand that attracting and retaining talent is essential for business success. Employee share incentives are an excellent way to incentivise employees and encourage loyalty and commitment. Providing equity to key team members can also help them to focus on business growth and align their commercial objectives with those of other shareholders. Click here to read our factsheet.
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Employee Share Incentives
Tax-efficient share incentives, like share option plans, are designed to encourage companies to allocate equity to employees.
The Enterprise Management Incentive (EMI) Option Scheme is popular for smaller private companies due to its flexibility and potential tax rate as low as 10%. Following a recent relaxation in the rules Company Share Option Plans (CSOPs) also offer a popular alternative, especially if EMI is not possible.
If share options are not the right fit, then other share awards can be considered. Tax rules can make a straight-forward allocation of shares to employees difficult if the shares are illiquid. Alternatively, the Share Incentive Plan (SIP), Employee Benefit Trust (EBT), or Growth Share Plans can be considered. Selling a controlling interest to an Employee Ownership Trust (EOT) offers tax breaks for both employees and sellers.
Read more in our factsheet