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Employee share option schemes
A major challenge for any business is to recruit and then retain people with the right attributes, mind-set and skills set especially where there is a shortage of them in the market.
We help our clients to think through the best way to design and implement an employee share option scheme, which is a highly effective way for businesses to reward and incentivise employees and helps to retain key staff. Such schemes align the interests of employees, especially senior executives, with those of the company. They can also help to save cost (e.g. where options replace a cash bonus) and also be tax efficient for both employee and firm.
Several types of option scheme exist including:
- Company share option plans (CSOPs)
- Employee Benefit Trusts (EBTs)
- Enterprise Management Incentive Schemes (EMI)
- Long Term Incentive Plans (LTIPs) and phantom share schemes
- Share Incentive Plans (SIPs)
- Unapproved Share Option Schemes
Our specialist Company Commercial team can advise on comprehensive solutions that meet your specific needs in designing a Share Option Scheme, its implementation and where there are exits from the scheme.
We work closely with your company’s accountant (or can recommend specialists) to ensure that shares are properly valued and any tax issues are handled appropriately, including HMRC clearance where needed.
Our team has considerable experience with share option schemes and with corporate transactions allowing us to provide you and your company clear, concise and practical support to ensure that your arrangements carry all relevant legal protections.
Example of our work:
We assisted a drone company with setting up a tax efficient EMI share option plan, in order to incentivise and retain key employees, including establishing plan rules, as well as individual agreements with employees.
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