Reports show EMI options hit record high
Employee ownership, and in particular Enterprise Management Incentive schemes (EMI) are at their most popular level ever. This is according to the latest HMRC statistics published in July.
Key stats for EMI schemes:
- Total EMI schemes increased to 10,350 (up 16% on the previous year);
- Companies making new EMI awards under those schemes increased to 3,500 (the highest ever);
- Employees receiving EMI awards jumped to 27,000;
- The net gain made by employees on EMI options exercised in the year was £530 million (the highest level ever).
RM2 Managing Director, Nigel Mason, was on the HMRC Advisory Group that created EMI back in 2000. Nigel said: “It’s very encouraging to see EMI being used so well and exactly as intended. EMI schemes allow smaller, entrepreneurial companies to attract talented employees with enticing offers of share options. Many of those are now delivering big gains for those risk-takers who join small firms. The UK has one of the best frameworks for entrepreneurial companies in the world, of which EMI is a central part. Long may that continue.”
A sad note...
The only disappointing statistics in an otherwise good news story is the slow decline of the all-employee schemes: Share Incentive Plan (SIP) and SAYE. The number of companies operating SIP fell to 780, the lowest number since 2005. One possible explanation is the higher cost of operating SIPs in private companies. In response, RM2 is developing a low-cost simple SIP scheme that can be operated by smaller companies at a reasonable cost. If employee share schemes are to continue to receive government backing and popular support, they need to reach all employees, not just a select few.