Share Schemes

Share and option schemes for employees

For employees, the EMI option scheme is the most beneficial but if the company or an employee is not eligible for some reason then there are other forms of schemes and incentives that may be suitable, as listed below. 'Growth shares' and 'CSOPs' are good alternatives. EMI is not available for non-exec directors or consultants, as they are not employees, but they can be granted 'unapproved options' or given growth shares. We have useful guides to share and option schemes which can help you choose a suitable plan - click here to download.

Our specialists can help with the following schemes and structures – please call or email –

  • EMI (enterprise management incentive) is the best share and option scheme for eligible employees - see our main EMI page here
  • Company share option plans (“CSOP”) – design and drafting of CSOPs. Tax efficient HMRC tax favoured options but with relatively limited flexibility and valuation cap. Useful where options are preferred to shares and where EMI is not available (more information is shown here and download our CSOP Guide here).
  • Growth share plans – design and drafting of a particular class of employee shares which have an inherent lack of economic entitlements but with the potential for employees to share in the eventual growth in value of shares. Growth shares provide tax and funding cost benefits to employees and tax savings to the employer and can be combined with EMI for extra efficiencies or can be an alternative to EMI if the company is ineligible for such a scheme. Growth shares may offer significant savings where the current market value of shares is already substantial, through their ability to reduce the up-front unrestricted market value of the shares. More info here and see our Growth shares Guide here.
  • 'Unapproved' or non-tax advantaged options – design and drafting of flexible options which can be used for non-employees, as a top-up to other arrangements or as a stand-alone incentive. They are called 'unapproved' because they do not have any specific legislated tax breaks, unlike the EMI and CSOP for example (more information is shown here).
  • Joint share plans (“JSP”) – design and drafting of JSPs. Shares are jointly held by employees and an employee trust on the basis that the employees are entitled to a share in the future growth in value of the company (possibly in excess of a target hurdle). Joint shares provide tax and funding cost benefits to employees, together with employer tax savings. Often used for listed companies or where establishing a separate class of growth shares is not feasible.
  • Phantom option plans – design and drafting of cash based incentives with the value of the pay-outs calculated by reference to increased share values. Phantom options are flexible and help to avoid share dilution but are relatively tax inefficient.
  • Share Incentive Plans – design and drafting of HMRC tax favoured all-employee Share Incentive Plans.
  • Listed company share plans – involving applicable plans mentioned above plus SAYE, Deferred Annual Bonus Plans, Co-Investment Plans and Long-Term-Incentive Plans/Performance Share Plans.
  • Internal share markets – where an exit is unlikely, for example in family owned companies, we can advise on the design, creation and drafting of internal markets for enabling employees to realise value from their holdings.
  • Employee Benefit Trusts – design and drafting of EBTs and associated legal and tax advice including disguised remuneration in the context of incentive plans.