EMI's new exercise window: reporting implications

The government's decision to extend the Enterprise Management Incentive (EMI) exercise window from 10 years to 15 years has largely been welcomed as a positive development for employees and growth companies alike.

Much of the discussion has focused on the additional flexibility available to option holders and the longer period during which EMI's tax advantages can potentially be preserved.

However, for the teams responsible for administering, governing and reporting on employee share plans, the reform raises a different set of questions.

For HR, Legal, Finance and Company Secretaries, extending the exercise window is not simply a plan-design consideration. It may also require a review of scheme documentation, employee communications, reporting processes and ongoing compliance obligations. 

If you’re wondering why now? Explore everything larger businesses need to know about EMI schemes in 2026.

So what should companies be thinking about?

Five questions every company should be asking

Use this list as a reference point. 

1. Do our existing scheme rules reflect the new position? 

The new EMI rules do not automatically update company share plans.

Many EMI schemes contain exercise provisions, leaver rules and option lifecycle assumptions that were drafted around the previous 10-year limit.

As a result, businesses should review:

• Scheme rules.
• Option agreements.
• Employee communications.
• Internal policies and guidance documents.

For some companies, the review may confirm that no changes are required. For others, it may present an opportunity to align existing arrangements with the new 15-year framework and future grants.

The key question is whether current documentation reflects how the company wants its share plan to operate going forward.

2. Should we review existing grants and future grant policies? 

The extension creates an opportunity to revisit broader share plan strategy.

Historically, many EMI schemes were designed around relatively short pathways to liquidity, with exercise often linked to an exit event.

Today's private companies frequently remain independent for longer, and employees increasingly expect more flexibility around how and when they can realise value from their equity.

When reviewing future grants, companies may wish to consider:

• Exercise provisions.
• Vesting schedules.
• Leaver treatment.
• Liquidity event triggers.
• Secondary liquidity opportunities.

For businesses planning future fundraising, secondary transactions or potential PISCES participation, ensuring plan design remains aligned with long-term objectives may become increasingly important. 

3. What does this mean for ERS reporting? 

While the rule changes themselves do not fundamentally change the requirement to submit annual Employment Related Securities (ERS) returns, companies should remember that share plan changes can have reporting consequences.

Whenever amendments are made to share plans or awards, it is important to understand whether any reporting obligations arise and whether existing records remain accurate and complete.

As employee ownership programmes mature, maintaining robust records around:

• Grants.
• Exercises.
• Lapses.
• Amendments.
• Leaver events.

becomes increasingly important.

For organisations managing large option pools, accurate administration is just as important as the initial scheme design. 

The extension of the exercise window provides a useful reminder to review whether current processes remain fit for purpose.

4. Are we capturing the information we'll need over a longer option lifecycle? 

One practical consequence of the reform is that options may remain outstanding for significantly longer.

For companies with hundreds of option holders, this creates additional administrative considerations.

Questions worth asking include: 

• Can we easily track grants over a 15-year period?
• Are employee records maintained consistently?
• Do we have sufficient audit trails?
• Can we efficiently manage exercises and leaver events years after grant?

As option lifecycles become longer, the operational burden of managing employee equity can increase if systems and processes are not designed to scale. 

This is particularly relevant for businesses experiencing rapid headcount growth or operating multiple share plans simultaneously. 

5. Do finance teams need to be involved? 

Where companies amend existing awards or redesign future grants, there may be knock-on considerations relating to: 

• Share-based payment accounting.
• Valuation assumptions.
• Financial disclosures.
• Audit discussions.

The impact will vary depending on the nature of any changes being made, but involving Finance teams early helps ensure that reporting considerations are addressed alongside legal and administrative ones.

For many organisations, the most effective approach is to treat share plans as a cross-functional responsibility rather than a standalone HR or legal project.

How Vestd can help 

Whether you're reviewing an existing EMI scheme or designing future grants around the new 15-year exercise window, ensuring your administration and compliance processes remain robust is just as important as updating the legal documentation. 

Vestd helps companies manage EMI schemes from grant to exercise, supporting accurate record-keeping, employee communications, ERS reporting and ongoing compliance. 

We can also help businesses review existing plan structures, implement future 15-year exercise provisions and prepare for evolving liquidity opportunities, including PISCES-compatible share plan arrangements. 

Unsure where you stand? Our free EMI readiness diagnostic helps Finance teams assess whether their current share plan governance, reporting and administration workflows are equipped to support longer option lifecycles.

Want deeper insights? Book a free, no-obligation EMI consultation today with one of our experts.