Research Backs EMI Effectiveness
Nearly 80% of employers offering employee share options under the Enterprise Management Incentive (EMI) say that the scheme helped them retain key and/or skilled employees and improve staff motivation, according to research commissioned by HM Revenue & Customs from Ipsos Mori. The research also found that more than two thirds of employers offering EMI options said that the EMI had helped improve company performance.
Four in five employers who have offered EMI options will continue to do so - many of the remainder are prevented only because they have grown to the point where they are no longer eligible. Employees, meanwhile, feel that the EMI's main impact is in engendering a feeling of ownership as well as providing tax efficient rewards.
None of this comes as surprise to our share scheme designers at RM2 who regularly receive positive feedback from employers about the success of the Enterprise Management Incentive. Much of the scheme's approval derives from its flexibility and the ease with which employee understand the benefits. There is little or no sign that proposed changes to capital gains tax rules (see previous post) will discourage companies from offering tax-advantaged employee options such as the EMI or approved Company Share Option Plan (CSOP).
Free factsheets on the EMI, CSOP and other tax-advantaged employee share incentives can be found at here. Alternatively call us on 020 8949 5522 and ask us as many questions as you like!