What do you want from an Employee share scheme?
You may be looking at an employee share scheme as the key to meeting one or more of the following objectives, to:
- Attract and retain staff across the company
- Provide targeted incentives to selected employees
- Foster a culture of team work and commitment
- Conserve cash and reduce the cost of performance based bonuses
What is the right scheme for you?
Once you've identified your objectives, you have to decide which of the many share schemes or share purchase plans will best help you achieve them.
For example, if you are looking to provide company employee benefits across your entire workforce, you could consider a Share Incentive Plan, which combines elements from share purchase schemes with share gift options.
Alternatively, you might consider one of the savings related schemes or share purchase plans that are accessible to all employees.
However, if you want to focus on a core group of key individuals in your company, it would be appropriate to offer employee benefits through a discretionary scheme, such as the Enterprise Management Incentive or Company Share Option Plan.
If for any reason your company does not qualify for one or other of these, there are other share purchase schemes such as one of the deferred share purchase plans or an unregulated share option scheme.
Why not take a look at our free fact sheets to find out more about the share schemes that might be suitable for you?
Are you interested in share schemes that are more tax-efficient?
Government approved schemes can deliver large tax savings to both employer and employees - but are subject to restrictions.
Government Regulated Share option schemes
Although subject to restrictions, these employee share option schemes usually offer more favourable tax advantages. They include:
- Share Incentive Plan (SIP)
- Enterprise Management Incentive (EMI)
- Company Share Option Plan (CSOP)
- Savings Related Share Option Scheme (SAYE)
For further details of tax advantages and disadvantages, see Chapter 3 of our free Guide
Non-Regulated Employee Share Plans
These offer more flexibility but with generally fewer tax advantages. They include:
- Gifts of restricted shares
- Gifts into trusts
- Unapproved share option schemes
- Deferred purchase plans
To work out the advantages v disadvantages, you can:
- download our free fact sheets on share schemes
- see case studies of how firms actually use employee share schemes
- contact us to receive free initial advice
Further help and information on employee share schemes
Our guide, "Employee Share Schemes: A Guide for Directors" (2006/07 edition), has detailed guidance on all aspects of the design, implementation and administration of all employee share schemes.
