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Share options: the low cost alternative to a pay rise | DFA Law Northampton Solicitors News

PLEASE NOTE: Information in this article is correct at the time of publication, please contact DFA Law for current advice on older articles.

Share options: the low cost alternative to a pay rise

When cash is short, small and medium-sized businesses should consider using share options as an alternative to a pay rise or a cash bonus. An approved share option scheme needn’t be expensive or complicated, and will act as a genuine long term incentive for key staff.

The Enterprise Management Incentive share option scheme is a “self approved” scheme that doesn’t require the prior approval of HMRC, and can be as long or short as you want. John Keeble, DFA Law’s incentives expert recently produced such a scheme on a single side of A4 paper!

EMI schemes can also be written so that options cannot be exercised until the company is sold. If an employee leaves, his options simply lapse. A simple, cost effective long-term incentive; maybe City bankers should consider them..

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