Share Option Schemes and Incentives

Attracting and retaining top talent is vital for business success. One of the most effective ways to achieve this is through employee share schemes and incentive plans. These arrangements not only reward your team but also align their interests with your long-term goals, creating a culture of shared success.

Why consider a share scheme?

• Attract and retain talent: Competitive rewards help secure and keep key employees
• Align interests: Employees share in your success, driving performance and loyalty
• Tax efficiency: Certain schemes, such as EMI, offer significant tax advantages
• Motivation and engagement: Ownership fosters commitment and long-term focus.

Popular options

• Enterprise Management Incentives (EMI): A tax-advantaged scheme designed for smaller, high-growth companies. EMI options offer flexibility and significant tax benefits for both employers and employees.
• Growth Shares: Allow employees to benefit from the future increase in company value, often linked to performance conditions.
• Company Share Option Plans (CSOP): HMRC-approved options suitable for a wider range of businesses.
• Unapproved Options: Flexible and bespoke, though less tax efficient.

Key legal and commercial considerations

Implementing a share scheme isn’t just about rewarding employees, it involves careful planning and compliance:

• Eligibility and HMRC rules: Ensure your scheme meets qualifying conditions
• Valuation: Accurate share valuation is essential for tax and legal compliance
• Documentation: Clear agreements protect your business and intellectual property
• Regulatory compliance: Meet Companies Act and HMRC reporting obligations
• Tax implications: Poor planning can lead to unexpected liabilities
• Ownership dilution and exit strategy: Plan for the impact on shareholders and future events like a sale or IPO (Initial Public Offering).

How can we support you?

Implementing a share scheme is a strategic decision. We provide clear, pragmatic advice and guide you through every step, helping you motivate your team, protect your business, and achieve your commercial objectives.

We combine legal expertise with commercial insight to design share schemes that work for your business. Our services include:

• Understanding your goals: We tailor schemes to your objectives and culture
• Designing the right structure: From EMI options to growth shares, we’ll recommend the most suitable approach
• Ensuring compliance: We handle all legal documentation and liaise with accountants for advance assurances, valuations and registrations
• Employee engagement: We help you communicate the scheme clearly and effectively to maximise its impact.