If any tax was payable on day one, then it may be that a small cash bonus arrangement can be used to pay the tax.
You might think that share-based incentives are complex to arrange and can leave businesses in difficulty if, for example, an employee leaves.
Similarly, it might be that a bonus is paid to the employee so that the shares can be issued at full value (which could be a lesser value if growth shares are used).
Of course, with issuing actual shares comes the need for an adequate shareholders agreement and articles of association, as well as the need to involve those employees in shareholder meetings and decision making. As such, this option may not be for all.
Ultimately, the way businesses look at remuneration is changing, and share based incentives is a big step forward, especially if those incentives are EMI options.
Thomas Clark is a partner and specialist in employee incentives at Moore Barlow