Enterprise Management Incentive

The Enterprise Management Incentive (EMI) is not to be confused with Executive Share Options that are aimed at retaining existing managers. Indeed, the Enterprise Management Incentive (EMI) is designed to attract top quality management in. Especially into smaller companies.

Smaller firms have long complained they can only offer share or other options of up to £30,000 to attract senior managers, as anything above this is taxed.

Share option packages of up to £100,000 per individual employee are allowed, so long as the options are exercisable within 10 years. The shares must be in an independent trading company that has gross assets of no more than £30 million. Meanwhile, the government has abolished the limit on the number of employees who can be awarded share options, provided the maximum value of options doesn't exceed £3 million in total.

The initiative should provide sufficient incentive for managers to leave the safe employ of blue chip firms. And move to smaller firms where they can get a stake. And maybe later make their fortune.

See our tax tables in our Tax section for more information.

Last Updated: June 2007 © Moneyextra.com

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