{"id":131664,"date":"2021-07-23T00:00:00","date_gmt":"2021-07-22T23:00:00","guid":{"rendered":"https:\/\/gs:8890\/academy\/communicating-the-benefits-of-an-emi-to-your-employees\/"},"modified":"2023-11-27T14:00:06","modified_gmt":"2023-11-27T14:00:06","slug":"communicating-the-benefits-of-an-emi-to-your-employees","status":"publish","type":"post","link":"https:\/\/www.jpmorganworkplacesolutions.com\/uk\/insights\/communicating-the-benefits-of-an-emi-to-your-employees\/","title":{"rendered":"Communicating the benefits of an EMI to your employees"},"content":{"rendered":"

When you\u2019re launching an Enterprise Management Incentive (EMI) scheme<\/a>, you\u2019ve got a lot to focus on. But eventually, you get to a point where it\u2019s ready. The EMI has a launch date. It\u2019s exciting \u2013 not just because it\u2019s the result of a lot of hard work, but because an EMI scheme is a great reward programme, delivering a real reward for employee efforts.<\/p>\n

But the thing is \u2013 you know that, but do your employees? An incentive is only an incentive if they understand it.<\/p>\n

So, now that your EMI is ready to go live, your work has only just begun. It\u2019s time for the next step \u2013 communicating the scheme to the rest of the company.<\/p>\n

\u00a0<\/h2>\n

Communicating the real benefits of an EMI<\/h2>\n

The tax advantages of an EMI are numerous, but people generally aren\u2019t incentivised by vague terms like \u2018tax advantages.\u2019 So, what do you do? Do you spell out the advantages an EMI scheme brings? Let\u2019s try it:<\/p>\n

With an approved EMI scheme, the employee is granted options at market value. If the market value increases dramatically over time, the employee still is only required to pay the original market value, without an income tax charge.<\/p>\n

Does that sound enticing? Sure, the information is incredibly exciting \u2013 that\u2019s a great deal for the employee \u2013 but it doesn\u2019t exactly drive the imagination into overdrive. How about this:<\/p>\n

The employee will have to pay some tax when they exercise the options, but it will be Capital Gains Tax, which is a much lower rate than Income Tax.<\/p>\n

It\u2019s better, but it\u2019s still very vague. You want your employees to be driven, motivated by a great reward, not working out the percentage points of Capital versus Income Tax.<\/p>\n

So, how do you communicate your EMI in a way that will drive enrolment and result in genuine engagement and enthusiasm from your key employees? It doesn\u2019t have to be hard. You just need to find your elevator pitch.<\/p>\n

\u00a0<\/h2>\n

The Elevator Pitch<\/h2>\n

\"CommunicatingCommunicating the concrete benefits of an EMI to employees is crucial<\/p>\n

The \u2018elevator pitch\u2019 is an important tool in any sales toolkit. Used well, and crafted carefully, it can be the deciding factor between an empty inbox and a full calendar. But how do you write a great elevator pitch?<\/p>\n

An effective elevator pitch uses a sort of shorthand. It takes something the audience is already familiar with and uses it as a framework.<\/p>\n

For example, how do you convince a movie producer to make the movie, Alien;<\/em>\u00a0a movie that relies heavily on the iconic imagery or performances, before a single sketch is made? Simple. Use an elevator pitch: Jaws, in space. <\/em>Everybody knows Jaws, <\/em>and what kind of movie it is. They also know it was incredibly successful. This pitch lets the existing idea do the heavy lifting.<\/p>\n

Obviously, your EMI scheme won\u2019t be as simple to distil into three words. But you can use the basic idea.<\/p>\n

Make it concrete. Make it familiar. And make it interesting.<\/p>\n

\u00a0<\/h2>\n

Making it concrete<\/h2>\n

EMI Options are a great benefit. The options have basically unlimited value \u2013 the share price can go higher and higher. And that\u2019s great in theory, but it is a bit vague in terms of motivations. It\u2019s hard to daydream about spending \u2018potential.\u2019<\/p>\n

So, make it concrete. This is where a dynamic cap table tool comes in handy. Take scenario modelling \u2013 it\u2019s not just for investors. It\u2019s great for you to see how different investments will impact your company, but it\u2019s also interesting for your employees (within reason, of course). Show them a few scenarios, and what it looks like for their bottom line, for their reward. Suddenly, the EMI is a lot more concrete.<\/p>\n

You can also compare the EMI to an old cash bonus scheme directly. After all, an EMI scheme is really just a new way \u2013 a better way \u2013 of executing an old idea. People understand cash bonuses. They might not be the best way to reward people, especially after-tax, but their simplicity is appealing.<\/p>\n

Show how much more money the employee stands to gain from the EMI, compared to a traditional cash bonus. (For example: \u2018Sure, you could have a \u00a32,000 bonus, but with an EMI, if the share price rises X points, you can have triple that, without Income Tax.\u2019)<\/p>\n

The most important thing to remember is that an EMI is a great scheme \u2013 you don\u2019t have to spin it or flatter it, it can stand on its own. Your employees just need to understand it, and they\u2019ll be convinced. So, tell them what they want to know, in a way that they can understand.<\/p>\n

Now you\u2019re ready \u2013 what\u2019s your elevator pitch?<\/p>\n

Launching and communicating an EMI share scheme can be daunting, but it doesn\u2019t have to be. The Global Shares Growth Platform for small companies is a flexible, trustworthy tool \u2013 we make your journey easier. Request a demo today.<\/p>\n

\t\t\t
\n\t\t\t\t\t\t\t\t\tRequest a Demo
\n\t\t\t<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

When you\u2019re launching an Enterprise Management Incentive (EMI) scheme, you\u2019ve got a lot to focus on. But eventually, you get to a point where it\u2019s ready. The EMI has a launch date. It\u2019s exciting \u2013 not just because it\u2019s the result of a lot of hard work, but because an EMI scheme is a great […]<\/p>\n","protected":false},"author":3,"featured_media":131665,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[544,620],"tags":[548,713],"class_list":["post-131664","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-employee-share-plans-uk","category-hr-uk","tag-all-uk","tag-emi-uk"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.jpmorganworkplacesolutions.com\/uk\/wp-json\/wp\/v2\/posts\/131664","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.jpmorganworkplacesolutions.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.jpmorganworkplacesolutions.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/uk\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/uk\/wp-json\/wp\/v2\/comments?post=131664"}],"version-history":[{"count":0,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/uk\/wp-json\/wp\/v2\/posts\/131664\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/uk\/wp-json\/wp\/v2\/media\/131665"}],"wp:attachment":[{"href":"https:\/\/www.jpmorganworkplacesolutions.com\/uk\/wp-json\/wp\/v2\/media?parent=131664"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/uk\/wp-json\/wp\/v2\/categories?post=131664"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.jpmorganworkplacesolutions.com\/uk\/wp-json\/wp\/v2\/tags?post=131664"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}