Employee Share Arrangements

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Employee share arrangements

Employees are almost always the most important asset in a business and to get the most out of them it is important that they are fully motivated and incentivised.

Key employees can be incentivised in a number of ways apart from immediate cash rewards through to Share Arrangements and deferred bonus solutions.

There are a number of tax favoured share arrangements and by far the most popular for small and medium size enterprises is the Enterprise Management Incentive Scheme, or in short the EMI Scheme.

Because the qualification requirements, as far as employees are concerned, are geared to those who spend the majority of their working time in the business it is not always possible to make use of the scheme.  In those circumstances consideration should be given to the Company Share Ownership Plan or in short the CSOP.

A Comparison of the two schemes can be seen here.

For more information about the EMI scheme, and the Online implementation package that we offer see here.

For more information about the CSOP scheme see here.


Where share arrangements are not considered by the owners to be an attractive solution then other solutions would include:

  • Phantom share schemes – effectively a deferred bonus arrangement based for example on the growth in value of the business
  • Deferred bonus arrangements using an Employee Benefit Trust as a vehicle for payment of the bonuses possibly at a future trigger date, for example the sale of the shares by the current owners.

For further information please contact us.