Episode #4
Tax-Efficient Management Incentive Plans
A great incentive plan is not about “perks” it's about making sure the people building the company feel the upside at the right time, with tax outcomes that do not backfire. We end our Growth of a Business series by diving into management incentives for a scaling business, starting with the hardest practical question: when should you put incentives in place if your share value is rising fast and your leadership team is still forming? We sit down with Jeremy Glover, Partner at Jurit LLP and Consultant at Howard Kennedy, to unpack how equity incentives work in the real world, including the tax trap every founder should fear: a dry tax charge, where someone owes tax without having cash to pay it. From there, we break down why the UK Enterprise Management Incentive (EMI) scheme is so widely used by growth companies, how qualifying EMI share options can defer tax until a sale, and why capital gains tax treatment can be so much more efficient than income tax. We also discuss National Insurance Exposure, and how employers think about risk, retention, and fairness all at once. Valuation and leavers are where the details matter. We talk through agreeing values, how minority discounts can affect option pricing, what “good leaver” treatment can look like, and how vesting protects the cap table while still rewarding real contribution. We then zoom out to cross-border reality: an Irish parent, UK operations, a US expansion, and what happens to options when employees move between the UK and US under a double tax treaty. We finish by comparing EMI options with growth shares, including hurdles and the risk of getting day-one valuation wrong. If you care about management incentive planning, employee share options, EMI schemes, and tax-efficient ways to retain key talent through an exit, this podcast is for you.
