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The Joy of Enterprise Management Incentives
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3 min read

Entrepreneurs explain why they set up an EMI scheme

Entrepreneurs explain why they set up an EMI scheme

Table of Contents

In the competitive landscape of small to medium-sized enterprises (SMEs), finding effective ways to attract and retain top talent while fostering growth is crucial - but far from easy. Luckily, there are tools to help. One such tool is the Enterprise Management Incentive (EMI) scheme.

Understanding EMI

EMI is a government-backed scheme designed to help UK SMEs attract and retain key employees by offering them share options. So far, so good, right?

EMI operates by granting employees the right to acquire shares in the company at a predetermined price. These share options serve as a powerful incentive.

Not only does this type of share scheme reward loyal employees, but it also aligns the interests of those employees with the overall success and growth of the company.

Think about it - even the most diligent employee is likely to work that little bit harder when the success of a business has a direct impact on their own financial wellbeing. It’s a win/win for everyone involved, and a no-brainer for most SMEs.

That said, any scheme can be made to look good on paper, only to reveal itself as anything but in practice. You may be wondering about practical examples of SMEs and startups setting up an EMI scheme: why did they do it, how did they go about it, and did it deliver?

To answer these questions, we’ve asked a few entrepreneurs to share their experiences with us.

So, why do companies set up EMIs?

One reason for setting up an EMI scheme, other than retaining talented employees, is a simple matter of fairness.

Svetlana Tarnagurskaja and Tom Dibble-Burge, co-founders of The Dot Collective, a consultancy specialising in all cloud-native enterprises, are among the entrepreneurs who set up an EMI scheme with Vestd’s help.

"I really wanted everyone to benefit from our commercial success,” Svetlana says.

Adam Hadley, CEO of London-based applied data science consultancy QuantSpark, said, "Certainly QuantSpark wouldn't be what it is without the team, and it's so important that we value every team member and ensure that their contribution is recognised.

"We went for the EMI option scheme in the end, and the main reason for that is because it's flexible, and it's fairly easy to understand."

Stephan Heinz, Chief Strategy Officer at myGwork, a business community for LGBTQ+ professionals, also felt that it was only fair for employees to have a share of the growing company, recognising that the growth was directly related to their work and their efforts.

“It's been a good incentive for additional senior hires - and general employee engagement,” he said.

“For everyone to feel like they have a stake in the game, for everyone to feel like the work they do drives directly the growth of the company - and the growth of the company has a direct benefit to them through the valuation of their own shares.”

Great, so EMI schemes are good - but aren’t they difficult to set up?

“It can be very daunting,” Stephan admitted. With many different types of share schemes and ways to set them up, companies may need help through the process - help that Vestd can provide.

"I think Vestd gave us security," Stephan added.

"At the beginning talking us through the different options and helping us understand it's not as complicated as we think and showing us that once the share scheme is set up there's a very straightforward, simple way to manage it online, without having to go through disjointed and ad hoc spreadsheets.”

Fred Thompson, CEO and founder of the learning platform Thirst, also saw great success with the scheme by using Vestd. “It makes a complicated setup process as easy as it can be and allows our team to see the growth of their options as the company progresses,” he said.

While there are other platforms to set up an EMI scheme, Svetlana said, Vestd was “dramatically” better. “It was really a no-brainer choice for us,” she added.

How did the EMI schemes work out?

All the entrepreneurs we interviewed were satisfied with their choice to set up an EMI scheme and have already seen benefits in terms of talent retention and growth.

Fred said, “This scheme allows us to pay back our performing and dedicated team as the startup grows (and is ultimately sold or moves to the next phase), but also allows our business to do the best job it can to retain our key talent to enable us to grow.”

And it’s not just the employers who benefit. There are clear benefits for the employees too. Mark Bradbury, former CEO and founder of Apply Financial, says that thanks to the EMI scheme, pretty much all his employees were able to pay off their mortgages - a huge win for everyone!


If you're interested in setting up an EMI scheme or want to know more, book a free, no-obligation consultation.

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