 Enterprise Management Incentives increase is “too little too late”
12 March 2008: The Chancellor’s decision to increase the limit for Enterprise Management Incentives (EMI) to £120,000 for individual employees is “too little too late”, according to Philip Fisher, Employment Taxes and Rewards Partner at PKF and author of ‘Employee Share Schemes’.
When EMI was first mooted in 1998, the upper limit of £100,000 of shares for each individual was proposed. In the ten year period since then, there has been no change until today.
In that time, executive wage inflation has increased by at least 150% and therefore it would have been logical for Alastair Darling to increase the EMI limit to £250,000 or even more.
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 | “Many companies will still be forced to mix EMI options with unapproved options, since the new limit of £120,000 will not meet the aspirations of the executives whom they wish to recruit or retain.
“To help companies motivate and keep their best staff, there should be a review of the levels as soon as possible with a view to bringing in a £250,000 limit at the earliest opportunity.” |
Philip also pointed out that a recent survey by Ipsos MORI has highlighted the views of both employers and employees that while EMI is worthwhile, it is not currently as effective as it might be. He concludes: “The Chancellor has missed a major opportunity to support smaller businesses.”
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Notes to Editors:
- PKF is a leading firm of accountants and business advisers with more than 1,800 partners and staff operating in 23 offices in the UK mainland firm, a wholly-owned financial planning company and associated offshore practices. The firm specialises in advising growing and entrepreneurial/owner-managed businesses, AIM and fully listed companies, and also has extensive experience in the public and not-for-profit sectors. Principal services include assurance and advisory; taxation; consultancy; corporate recovery and insolvency; corporate finance and forensic. The firm has particular expertise in advising sectors such as hotels and leisure; mining and resource; public sector; real estate and construction; professional practices; not-for-profit; and medical. The firm’s web site is www.pkf.co.uk.
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