EMI Options, Growth Shares Or Both?

For an eligible company wanting to implement an employee equity incentive solution, EMI is usually the obvious starting point. It offers unusually favourable tax treatment, requires no investment at grant and means employees do not become shareholders until exercise.

Growth shares do something different. They can concentrate management's participation in a particular part of the equity outcome - for example, value above an investor hurdle - without giving management the same participation in value already created.

Sometimes, though, you want both.

A genuine growth-share class may have relatively low value today because its rights are contingent on sufficiently high future equity values. EMI can therefore be used to deliver meaningful exposure to those outcomes within the available EMI limits.