Providing employees with a way to participate in company ownership helps with motivation and retention. Particularly when cash isn’t available for salary increases/ bonuses.
A very useful tried and tested way of doing this is the EMI scheme, which allows founders/ investors to keep control of the company’s shares whilst also being tax efficient.
EMI plans can be designed in a flexible way so you control when employees receive value, for example when they’ve been with the company for a certain period of time and/ or hit certain performance milestones (vesting). They can also be conditional on company milestones, such as a sale or IPO. EMIs also deliver tax savings to both the employee and the company. Because shares received through an EMI are subject to capital gains tax, not income tax and national insurance contributions.
Let us know if you want to know more. We work with some great partners that can help you put in place and, importantly, manage, the right scheme for you.