Our Employee Share Option Schemes Service
What Are Employee Share Option Schemes?
The increasing popularity of employee share option schemes is attributed to their strategic benefits, recognised by governments, directors, and shareholders.
This extensive use highlights the flexibility and potential advantages these schemes offer to businesses and employees alike.
The main reasons that share schemes are used is to:
- Attract individuals to a senior role or to retain them over a long period of time
- Motivate senior employees to increase performance and achieve greater targets
- Get more “buy in” from employees as it allows them to share in the success of the company
Share schemes can be either HMRC-approved or unapproved.
If they are approved, the individual and/or the company issuing these share options benefit from specific tax reliefs, further enhancing their ”value”.
For a scheme to be approved, the scheme terms, the company, and the employees must qualify under the relevant legislation.
Different Types of Share Schemes and Their Agreements
There are a number of types of share schemes that are commonly used, including the following:
Enterprise Management Schemes (EMI)
EMI options are by far the most popular as they can be drafted for groups of employees as part of a scheme or tailored to the requirements of an individual employee.
Being an approved scheme, the employee will, subject to satisfaction of certain conditions, benefit from relief from income tax and national insurance contributions (NICs) on the receipt of the shares as well as benefit from business asset disposal relief on capital gain tax on a subsequent sale of the shares. Such schemes are often used for companies aiming to attract and retain top talent.
The conditions to exercise these share options may be flexible and tailored to achieve specific company performance targets or other criteria.
Company Share Option Plan (CSOP)
CSOPs are approved schemes for larger companies giving the employee, subject to satisfaction of certain conditions, income tax and NICs relief on the receipt of the shares.
They do not need to apply to all employees and can be subject to performance criteria.
However, they can only be exercised at least 3 years after their grant in order to receive the tax benefits.
Save As You Earn Schemes (SAYE)
These are both a share option scheme as well as a savings scheme and are more popular in companies with large numbers of employees.
They apply to all (eligible) employees ,making it more complex to administer.
As an approved scheme, subject to satisfaction of certain conditions, the employee receives income tax and NICs relief.
Share Incentive Plans (SIP)
These allow employees to acquire shares as opposed to share options.
There are 4 types of share available under a SIP: free shares, partnership shares, matching shares and dividend shares.
These schemes are very flexible as the company can decide the elements it wishes to implement and the level of award.
Unapproved Schemes
Companies may issue unapproved options to maintain flexibility in rewarding employees without meeting HMRC qualifying standards. These are very flexible and are beneficial where the shares under option do not qualify under any approved schemes.
Unapproved schemes, while lacking tax benefits, can also grant significant exercise price flexibility.
Employee Benefit Trusts (EBTs)
EBTs are commonly used in larger employee share schemes such as CSOPs, SAYE schemes and SIPs where the EBT is required to acquire and hold shares in the company to provide benefits to both employees and former employees.
They can also be used to simply “warehouse” shares on behalf of the company.
Understanding the differences between these enables decisions to meet specific business and employee needs.
Conditions to Exercising Options
Share options can include a number of different types of conditions which need to be achieved before the option can be exercised.
These can be performance or event related, for example:
- Performance conditions – these can be based on financial performance of the company such as sales or profit or on an individual or team basis
- Event conditions – the most common event is a sale of the company (known as an “Exit Only Option”), but other events could be a minimum length of service
The conditions could also be a mixture of both, for example a sale of the company provided that the sale value is of a minimum amount.
How Our Corporate Team Can Help
We have assisted companies in preparing all types of employee share option plans, including:
- EMI options: individual plans and schemes with individual awards – exit only, performance / time based and combinations
- We regularly work with companies in conjunction with tax advisors / accountants in assessing the options available and setting up suitable schemes, complying with HMRC requirements and ensuring they meet the legal and tax objectives
- A well-crafted agreement can provide substantial future tax advantages for the company and employees
Why Work With Our Corporate Lawyers?
- We have been ranked as a Top Tier law firm by the Legal 500 for the last seven years.
- Our Corporate Team has been ranked Band 2 in the Chambers and Partners UK Guide, with Department Head M. Akeel Latif ranked as Band 1.
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- Price transparency - we provide our clients with an estimate at the outset of any piece of work, with ongoing updates throughout the matter.
- Our Corporate Partner-led service ensures you receive the very best legal advice and commercially minded support.
- We have a large team with corporate finance experience across a diverse variety of business sectors, including financial services. Our team focuses on achieving your objectives and meeting your deadlines, especially in legal matters pertaining to public companies.
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- Take a look at the Myerson Promise for further benefits of working with us here.
Testimonials
Legal 500, 2027
Just really humble and down to earth but extremely knowledgeable, Chris Moss is second to none and is always at the end of the phone. I could not rate him highly enough; he is the best commercial lawyer I have ever worked with in my 20-plus-year career.
Mr Preston
Chris Moss's advice and support was exceptional. I would highly recommend.
Paul Hinchliffe - Managing Director, Bott & Co Solicitors
I would like to thank the team for their expertise, guidance and support throughout our transition to employee ownership. The move required careful planning across a range of legal, tax and governance matters. Simon Nolan and the wider Myerson team worked closely with us throughout the process, providing clear advice, practical solutions and reassurance. Their experience and collaborative approach helped us successfully navigate a complex transaction. We are extremely grateful.
Legal 500, 2027
They have extensive experience and care about the commercial outcomes for their clients.
Legal 500, 2027
Andrew Brown is always right on it and delivers for his clients.
Legal 500, 2027
A great team with whom to work for its practicality, availability, and responsiveness, coupled with technical excellence.
Legal 500, 2027
Exceptional legal knowledge but immensely approachable and personable. I love the culture of the organisation and how they give their junior members responsibility, and I love the way they interact with each other; it never feels hierarchical. They are always transparent on billing, and there are never any surprises. I feel that they have invested real time in getting to know our business.
Legal 500, 2027
Each member of the team delivered what they set out to do while also being available for meetings at short notice aimed at resolving technical issues. Each team member was highly responsive at all times, allowing the transaction to flow at a fast pace. Similarly, each team member was able to cut through the noise and focus the shareholders of our client to make key decisions at important points.
Mr. Maitland, VendiTech
Myerson has been exceptional to work with, combining a high level of professionalism with a pragmatic, commercially minded approach. Communication is always clear, timely, and responsive, which gives us real confidence when navigating complex decisions. Chris, Charlotte and Richard provided invaluable support across multiple areas of our business. Their guidance has been instrumental to our continued success and has played a key role in giving us strong confidence around compliance as we scale and evolve.
Gary Johnson, CDL
The strength that Myerson brings to CDL and its group companies is an intimate understanding of our products and services and how they are utilised in the various sectors of our evolving marketplace. CDL and Myerson have worked together for over 10 years and in that time CDL have been fortunate to attract, court and secure many new contracts including large banking and global organisations.
Tim Webb, RTA Claim Solutions
Myerson have been hugely professional and supportive in providing expert legal advice to the business. For us, their quality of service and expert knowledge of commercial business was equally as important as their undoubted legal capabilities. We hope to be able to continue to work with them over the long term.
Tony Sampson , J2 Retail Ltd
Unphased by the ‘big names’ and frequently head to head with much larger firms, they have always worked effectively on our behalf as both a business and as shareholders, and have represented us extremely well in many complex and difficult situations. Myerson partners and lawyers have an excellent grasp of the commercial realities of our business – something that is equally as important as their undoubted capabilities as lawyers.
David Hibbert, Stax Trade Centres PLC
We were introduced to Myerson back in 1986 with a view to them advising us on our MBO. Myerson have always been there with clear, easily presented counsel as to how to deal with every aspect of business life. We respect their honesty and integrity and have no qualms in recommending them to any up and coming entrepreneurs.
Mr. Roberts, Communications Plus Ltd.
Chris Moss, Melisa Chaplow and Charlotte Peers have been exceptional. Thank you.
Mike Forsyth - Founder and Chairman, Safer Sphere
Myerson Solicitors acted for us in a complicated Management Buy-Out transaction. Akeel, Palma, Simon, Andrew, and the team supported completion in a tight time frame with the utmost professionalism and diligence. They coordinated and cooperated seamlessly with the wider advisors and stakeholders, ensuring full protection and compliance with the transaction. We have worked with Myerson on a number of legal aspects for over 5 years, and would highly recommend their services.
Colin
Supported my business from the outset. Always there when needed. Superb integrity and pricing. Always gets the job done effectively with open dialogue and communication at every point. Yes I highly recommend.
Chambers UK Guide 2026
The Corporate team at Myerson is the perfect size for a balance between expertise and personal service.
Chambers UK Guide 2026
Myerson's Corporate team is attentive, available and technically knowledgeable.
Chambers UK Guide 2026
Myerson's Corporate Team were good to deal with and we worked well together.
Legal 500, 2024
Responsive, always willing to provide some direction, guidance and support, even at short notice, and, due to the familiarity of the business across the team, there are multiple contact points which means there is always somebody to speak to who understands our company and objectives.
Legal 500, 2024
The whole team is responsive and highly approachable, taking time to understand the business and framing legal matters in a manner understandable to the audience – working with a range of people across our business.
Legal 500, 2024
They have always looked at the whole picture and taken time to understand my business, so advice is tailored. No time-wasting and treated like I am their only client.
Legal 500, 2024
Well resourced and able team that expertly and adequately handle whatever we throw at them as our retained commercial lawyers.
Legal 500, 2024
Smaller boutique corporate team who are very responsive, professional and add value to corporate transactions.
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