EUROPEANCHAPTER

Enterprise Management Incentive (EMI) schemes provide significant tax benefits for trading companies with gross assets of £30 million or less, allowing them to recruit and retain employees through share options without incurring income tax or national insurance contributions upon grant or exercise. Companies can grant options valued up to £250,000 per individual, with a total limit of £3 million, while ensuring that qualifying employees work at least 25 hours per week or 75% of their time for the company. However, companies must navigate potential pitfalls, such as changes in control or trading activities, and adhere to strict reporting requirements to maintain the favorable tax treatment of EMI options.

AXA has launched its annual employee share offering, "Shareplan 2024," allowing over 110,000 employees in 40 countries to participate through two plans: the Classic offer and Guarantee Plus offer. Employees can purchase shares at a discount, with the Classic offer providing shares at 80% of the reference price and Guarantee Plus at 93.6%, along with a guaranteed return through AXA’s partner bank. The maximum capital increase under this offering is around €135 million, and the new shares will be eligible for dividends from January 1, 2024.

RA Information Systems has transitioned to an employee-owned business through an Employee Ownership Trust (EOT), transferring 100% of the company's shares to the trust. This move is aimed at preserving the company's independence, recognizing the contributions of its employees, and maintaining the founders' legacy and the company's culture. The founding family will remain actively involved, ensuring stability, while the new ownership structure aligns with the company's long-term vision and commitment to its employees and clients.

Revolut, now Europe's most valuable private tech company with a $45 billion valuation, recently conducted a secondary share sale, enabling its employees to gain $500 million in liquidity. The company, which has grown rapidly with $2.2 billion in 2023 revenue and securing banking licenses in Mexico and the UK, is predicting significant growth in 2024, including an increase to 50 million users. Speculation is rising about a possible stock market debut, with Revolut potentially considering a New York listing.

JTC has announced its proposed acquisition of Buck UK's and European Share Plan Administration and Trustee businesses from Arthur J. Gallagher & Co., pending regulatory approvals. This acquisition is expected to enhance JTC's Employer Solutions platform by adding a team of 16 professionals and a portfolio of high-quality clients. Both companies emphasized the importance of cultural alignment and shared values in finalizing the deal, with JTC's CEO highlighting the synergy with their long-standing commitment to shared ownership.

Startups often offer a mix of equity compensation and salary to attract and retain talent, with the balance dependent on the company's financial resources and the competitive market landscape. In the UK, the current high inflation and tight labor market have pushed average wages up by 13% since early 2022, making it crucial for startups to understand salary ranges and negotiate effectively. Equity compensation, while beneficial for startups in managing budgets and motivating employees, comes with complexities and risks that both employers and employees need to carefully consider.