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Employee Share Schemes

Employee Share Schemes. Philip Fisher Employee Benefits Partner. Recruitment and Retention. Motivate key people Retain key people Incentivise all staff Tax breaks Pay-off on float or sale Start again. HMRC Approved Schemes. Enterprise Management Incentives (EMI)

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Employee Share Schemes

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  1. Employee Share Schemes Philip Fisher Employee Benefits Partner

  2. Recruitment and Retention • Motivate key people • Retain key people • Incentivise all staff • Tax breaks • Pay-off on float or sale • Start again

  3. HMRC Approved Schemes • Enterprise Management Incentives (EMI) • Share Incentive Plans (SIPs) • Company Share Option Plans (CSOPs) • Sharesave (SAYE)

  4. Unapproved Schemes • Share options • Direct shareholdings • Restricted shares • Partly paid shares • Phantom share options

  5. EMI Schemes • Selective • £100,000 per individual/£3m per employer • Qualifying trades/£30m Gross assets • Freedom • No tax on grant • No tax on exercise – maybe • CGT on sale • Taper relief from grant

  6. SIPs • All employee • Shares • Free shares - £3,000 • Partnership shares - £1,500 • Matching shares - £3,000 • Dividend shares - £1,500 • In trust for five years

  7. CSOPs • Selective • £30,000 per person • Minimum exercise price • 3 years minimum period • Taper from exercise

  8. Sharesave • Linked to SAYE scheme • Monthly savings • 3/5/7 years • Linked to share option

  9. Takeovers • Read the rules • Exercise? • Rollover? • Buy out options?

  10. Floats • Insider information • Closed periods • Option exercise • Stock Exchange requirements

  11. International Considerations • Mobile Staff • Differing tax regimes • Hidden pitfalls • Tax planning

  12. ABI Guidelines • Only “Guidelines” • Public companies should comply • Timing of grants • Restrictive • Length and price of options • Performance conditions • Total shares

  13. Philip Fisher Employee Share Schemes pfisher@cvdfk.com www.cvdfk.com

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