Enterprise Management Incentives

Reward hard-working employees with shares in your company.

If you’re a growing small company, and you’re struggling to match competitive market rate salaries for staff, you might want to consider using Enterprise Management Incentives (EMIs).

With EMIs, you can pay your employees with shares options in your company. These share options will give the employees the right to buy shares in the future at a price that is fixed today. If the value of the company increases over time, the employee is then entitled to buy discounted shares, and thus make a profit.

As an example, if you have to hire an industry specialist, where the market rate salary is approximately £75,000, but you can only afford to pay them £40,000 at the moment, you can use EMIs to offer them discounted shares. If this employee accepts the offer, and helps the company grow over the next few years, they could make a lot more money compared to having a £75,000 fixed salary.

This is an excellent incentive which makes it easier to hire and retain key staff members at an early stage in your business. It’s particularly attractive to smaller startups that require specialized staff to grow.

It’s also important to note that employees with share options will have the choice of buying shares in the company in the future. This means that if they lose faith in the company, or the value of the company decreases, they can choose not to buy the shares.

Who can Qualify?

To be able to take advantage of EMIs, the company has to have assets worth less than £30 million, have less than 250 employees, and be permanently established in the UK. There are also other limitations, like certain industries that are excluded from the scheme.

How can I set up EMIs?

The great news is that you can design your company’s EMI scheme however you like. You could decide that employees have to stay in the company for a certain period of time before being granted share options, or that employees lose their share options if they leave the business.

Get expert advice

We recommend that you seek advice from an expert to help you decide whether EMIs are the right choice for your business, and to help you design EMIs that suit your needs.

At Pentins we have excellent experience in assisting businesses with EMIs. Our approach to accounting allows us to work closely with your company, which gives us an unparalleled ability to give you the best advice tailored to your situation.

In addition to helping you set up EMIs, we can also advise you on other tax relief options, such as EIS or Research and Developmentcashflow advice and other accountancy services.

If you would like to discuss how we can help you, or to find out whether EMIs could be right for your business, book a free call with one of our expert advisors today.

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