Share Option Schemes in Recruitment Agencies by Gary Watson

1. An Introduction to Share Options
By Gary Watson
September 2015

2. Investigo
Do they work?
YES
... and NO
Share Option Schemes

3. Investigo
Why Would You Implement A Share Scheme?
• To aid recruitment
• To improve retention
• To motivate key employees
• Is cost effective
• Is tax efficient

4. Investigo
What Are The Benefits To Your Employees?
• They acquire a stake in the business
• Opportunity to accumulate wealth
• Relatively risk free

5. Investigo
3 Categories Of Share Scheme
• Purchase and award of shares
• Award of options
• Phantom share awards

6. Investigo
What Is An Approved Share Scheme?
• EMI
• CSOP
• SAYE
• SIP
A scheme for which certain tax benefits are available to employees and employers

7. Investigo
What Is An Unapproved Share Scheme?
Everything else!

8. Investigo
Enterprise Management Incentive
• Aimed at smaller qualifying trading
companies
• Option exercise price can be
discounted to the market value of
the shared at date of grant
• There is no income tax or NIC on
the grant
• Less than 250 employees
• Gross assets of £30m or less
• At sale employees qualify for
entrepreneur’s relief at 10%

9. Investigo
Company Share Option Plans
• Used where EMI options cannot be
granted
• Gives you an option to buy up to
£30,000 worth of shares at a fixed
price
• Options cannot be exercisable within 3
years of grant date
• There is no income tax or NIC on the
grant
• Grants are subject to CGT

10. Investigo
Save As You Earn
• Must be available to all employees
who’ve been with the company for a
certain time
• The price is fixed at the start
• You can save up to £500 a month out
of your take home pay
• At the end of the savings contract (3 or
5 years) you can use the savings to buy
the shares
• The interest and any bonus you receive
at the end is tax free
• Gains are subject to CGT unless you put
the shares into an ISA or pension as
soon as you buy them

11. Investigo
Share Incentive Plan
4 different ways you can receive shares
under SIP:
• Free shares
• Partnership shares
• Matching shares
• Dividend shares
• After 5 years there is no income tax or
NIC on their value when you acquire
them
• Gains are subject to CGT

12. Investigo
When Do Share Schemes Not Work?
If share schemes are used to attract, retain and motivate, then there are 4 things
that you have to be right about:
• Qualifying criteria
• Timeline
• Transparency
• The quantum

13. Timeline Of Investigo 2003 – 2015
Change
Management Guildford
Property and Facilities
Management SAP
The Birth of
Investigo London
3RD August 2003
Accounting
& Finance
St Albans Strategy Reading Milton Keynes Procurement &
Supply Chain
HR
Launch of
Sydney office
2006 2008 2010 2012 2014

14. GDP 2003-2015

15. Investigo
Investigo Turnover 2003–2015
£74.3
£66.0
£53.1
£47.0
£42.4
£32.0
£26.0
£19.2
£11.5
£6.5
£3.3
£0.6
14/15
13/14
12/13
11/12
10/11
09/10
08-09
07-08
06-07
05-06
04-05
03-04
Million
£83
Million
forecasted
for 2015/2016

16. Investigo
Darren Burns
Director – Banking & Financial Services
“Investigo is a genuine half way house between a
large scale recruitment business and starting on
your own. Unlike other ‘Equity’ schemes and
empty promises around the market, the EMI
scheme at Investigo is very real and very
transparent. The scheme is aligned from Day
1. The financial incentive is very attractive and
was a huge factor when joining Investigo. This is a
huge reward for circa 5 years of hard work. It’s not
for everyone, so you should be confident in
building a brand and a profitable business. If you
back yourself then Investigo have proven to share
wealth amongst the group. I interviewed at 9
companies and Investigo came up trumps!”

17. Investigo
Stuart Bonner
Director – Property
“Being a qualified accountant before getting
into recruitment, understanding company
valuations was something I’d trained in. I
guess this made me more cynical than most
when it came to offers of share schemes
worth nothing. The absolute total
transparency of the deal at Investigo has
been key for me to believe and trust in it’s
potential outcome”

18. Investigo
Ben Cowan
Director - Change Solutions
“Apart from the culture and people, a major
attraction for me to join Investigo was the
transparent and straight forward LTIP. The
scheme relates directly to the performance of
the business I run, not on elements outside of
my control, which I found particularly
appealing. The EMI scheme demonstrates
Investigo’s commitment to me, and creates
loyalty in return, enabling us to focus 100% on
delivering on Investigo’s vision. The EMI
scheme, structured as it is, puts my “pay out”
destiny in my own hands – something I find
extremely motivating.”

19. Investigo
Terry Dawson
Associate Director – SAP
“Leaving my last company and choosing to join
Investigo was the biggest decision of my life,
one of the reasons I chose to join was the LTIP/
EMI scheme that was presented to me. Unlike
other share option schemes that seemed
confusing and less than straight forward, the
Investigo scheme was simple. It will reward me
based on the results of my own performance
and that of my division, so in simple terms I
know exactly how much profit I need to
generate for the company in a set period of
time in order to achieve my financial goals.
This clarity and straight forward approach helps
me to focus on my goals and is hugely
motivating for me. Investigo has literally given
me the opportunity to change my life within a
period of 3-4 years!”

20. Investigo
Any Questions?
Please contact Gary Watson on: gary.watson@investigo.co.uk