Share Schemes for Key Employees

Increasingly, equity incentives and shares schemes are an essential part of the toolkit for private companies looking to attract and retain key talent.  

A well designed share plan doesn’t just help your business compete effectively in the marketplace to hire and keep the best people – the scheme can also help focus the top team on clearly defined commercial goals.

Certain tax efficient and flexible share schemes have been designed especially for private companies that can be offered on a discretionary basis, so you can set up a tailored scheme to meet your specific requirements.  That could include choosing who participates an d how much equity they might receive, as well as including specific performance target that are tied closely to your company’s objectives.

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Enterprise Management Incentive

EMI options are the most popular way for smaller, private companies to deliver equity to key employees.  Options can be granted on a discretionary basis, subject to generous limited.  Gains under EMI options will usually deliver an ultimate tax rate of as little as 10%

 

Company Share Option Plan

Not all companies qualify for EMI.  For example, companies with 250 or more employees or those carrying out certain trades (e.g. professional services) can’t use that scheme.  CSOP is slightly less flexible than EMI, but can still deliver tax efficient discretionary share options for key staff.

 

Growth Share Plan

This plan is perfect for companies where the existing owners want employees to share in future growth,, but protect existing value in the company.  It is ideal for participants who are responsible for driving business growth.  Capital gains tax treatment is typically available and additional tax efficiency can be built in if the plan is operated within an EMI wrapper.

 

Deferred Share Purchase Plan

The DSPP works by providing a more affordable way to acquire shares, with capital gains tax treatment typically applying.  DSPP arrangements can be helpful for non-employees such as consultants or NEDs who may not qualify for tax advantages employee share schemes.P

 

ESS for Private Companies Book
Employee Share Schemes for Private Companies

Next steps

RM2 has more experience than any other team in the UK in designing, implementing and operating employee share schemes in private companies.  We have worked with hundreds of private companies.  To unlock the power of employee ownership in your company, and for a free consultation with one of our technical experts without commitment, call  020 8949 5522 or email enquiries@rm2.co.uk  

Watch a recorded webinar

Employee Share Schemes for Private Companies Webinar

Relevant resources

Book

Get your copy of our authoritative guide on employee share plans

Fact Sheets

Download a fact sheet to find out more about any share scheme

Blog Post

Using performance targets in your employee share plan

EO Top 50

See the UK's 50 largest employee-owned companies