It can vary greatly depending on the complexity and scale of the scheme and the complexity of your company’s share structure.
Our lowest cost scheme is an entry-level simple share option plan in which the options can only be exercised when the company is sold. This is offered as a subscription service. Costs start at just £95 plus VAT per month for up to five participants. Go to EMI Online for more details.
Share schemes in private equity backed businesses with complex share structures or schemes with large numbers of participants can cost upwards of £20,000 plus VAT.
Here are some indicators of what will add to the cost of a share scheme. The golden rule if you want to keep the costs down is to keep things simple. And the simpler the scheme, the more likely it is to be fully understood and appreciated by the participants.
Costs will be lower if…
Costs will increase if…
|Participants get options||Participants get shares|
|Options are exercise-able only on a sale of the company||Options are capable of exercise before a sale event|
|Options have no performance conditions other than time-based vesting||Options have bespoke performance conditions|
|The company has a single class of ordinary shares||The company has multiple share classes|
|Employees are given awards over that single class||A special class of share is created for employees, for example “growth shares”|
|No share valuation is required||An HMRC share valuation assurance is required|
|A single share scheme can cover all participants||Multiple share schemes are required (e.g. to accommodate participants who are not employees)|
|There is only a one-off award||Regular awards are anticipated|
|There are fewer than five participants||There are more than five participants|
|No equity modelling is required||A bespoke equity model is required|
|Awards are made over new issue shares||Shares are sourced from existing shareholders|
|The company’s statutory books and filings are in good order||Extensive repairs are needed before a share scheme can be implemented|