The Challenge
In today’s competitive business landscape, retaining top talent is paramount. For a London-based professional services consultancy, this challenge was particularly acute. With a strong foundation built on a collaborative and people-centric culture, the company had experienced significant growth since its inception in 2015.
However, the founder recognized that to sustain this trajectory, it was essential to offer more than just competitive salaries and bonuses to key senior team members. The challenge was to find a strategic way to reward and incentivize these individuals while also aligning their interests with the long-term growth of the business.
The Solution
Ascentis Accountants was brought in to explore options that would both motivate the senior team and enhance overall business value. After careful analysis, we recommended the implementation of an Enterprise Management Incentive (EMI) Share Options Scheme.
An EMI scheme offers employees the opportunity to acquire shares in the company at a predetermined price in the future. The key benefits are threefold:
- Employee Motivation: By offering a stake in the company’s success, employees become invested in its growth. The potential to reap financial rewards from the company’s increased value can be a powerful motivator.
- Business Growth: Aligning the interests of key employees with the company’s objectives can drive performance and innovation. A high-performing team is directly linked to increased business value.
- Succession Planning: An EMI scheme can be a valuable tool for business owners looking to transition ownership or attract new investors. By offering shares to key employees, the business can build a strong management team capable of driving future growth.
From a tax perspective, EMI schemes offer significant advantages. There is no income tax charge on the grant of options, and when shares are eventually sold, any gain is typically taxed at the more favourable capital gains tax rate rather than income tax.
The Outcome
By implementing an EMI scheme, the client has taken a proactive step towards securing its long-term success. The scheme not only rewards and retains key talent but also fosters a culture of ownership and shared responsibility. As the company continues to grow, the employees who have been granted share options stand to benefit significantly from their contributions.
At Ascentis Accountants, we are proud to have helped this client to develop a tailored solution that aligns with the company’s goals and objectives. Get in touch with our accounting team to learn more about how we can help your business.