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In February 2020, the QCA issued a survey on employee share schemes. The purpose of the survey was to establish why smaller companies offer employee share schemes, the schemes they operate, their reasons for doing so and the difficulties they encounter.

Overall, 61 small and mid-size quoted companies took part in the survey. The key findings are as follows:

  • Of the 61 participants, 56 confirmed that their company operated an employee share scheme.
  • The three most popular schemes used by small and mid-size quoted companies were: Enterprise Management Incentives (44.23%); in joint second – Company Share Option Plans (30.77%) and Long-Term Incentive Plans (30.77%); and finally Save As You Earn (28.85%).
  • The top three reasons for operating an employee share scheme given by companies were to (1) reward employees at 87.27%; (2) recruit and retain staff at 67.27%; and (3) encourage employee ownership in the company at 65.45%.
  • Over half (53.85%) of the respondents indicated that they used the QCA Corporate Governance Code to help them design their employee share scheme.
  • The understanding of plans (55.77%) and share performance/perception of risk (53.85%) were cited as being the two biggest challenges that small and mid-size quoted companies and their employees face when participating in employee share schemes.
  • The key change sought after for small and mid-size quoted companies was in relation to EMI, and in particular, expanding its scope.

If you wish to read the results in full, please click here.

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