The
Government’s Share Incentive Plan for employees, which was launched in 2000,
looks set to be a success according to a survey by New Bridge Street
Consultants (NBSC).
NBSC’s
survey investigated the popularity of the Government’s new Share Incentive Plan
(SIP) for employees among FTSE 350 companies and reveals that 45 per cent of
those responding will be offering the scheme to their staff by the end of the
current tax year next April.
Rory
Cray, of NBSC, said: "These figures are encouraging for the Government.
Overall, we found a high level of interest in SIP among FTSE 350 companies –
151 responded to our survey.
"The
Government set an initial target of about two million employees taking part in
the SIP. This is certainly an ambitious target, but if the companies responding
to our survey follow through on their plans for the SIP, this alone could give
about 750,000 employees the chance to participate by April 2003.
"The
Government’s decision to retain the very popular Save As You Earn Share Option
Scheme alongside SIP appears to be working. In our survey, more than 85 per
cent of the companies that will be offering SIP already have SAYE and will
offer both plans to employees in future. It seems companies are using SIP as a
valuable adjunct to SAYE, rather than as a replacement for it."
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The
SIP has three main elements which companies can offer in a variety of
combinations. First, employees can buy partnership shares out of pre-tax salary
up to a limit of £125 per month or 10 per cent of salary if lower. Second,
companies can also match an employee’s investment at a ratio of up to two free
matching shares for each one purchased. Finally, employees can give up to
£3,000 of free shares in any tax year, according to pay and linked to business
unit or individual performance.
