Share Incentive Plan
Also found in: Acronyms.
Share Incentive Plana UK scheme introduced in 2000 (originally as the All Employee Share Ownership Plan) which enables employees to acquire SHARES in their company. The Plan is aimed at motivating employees to work more productively and in aligning their interests more closely with those of outside shareholders.
Under the Plan shares can be offered to employees in three ways: partnership shares where employees can buy shares out of their gross pay up to a maximum of £1500 per year (or 10% of gross pay, whichever is lesser). Because shares are bought out of gross pay the employee pays less income tax and national insurance; matching shares given by the employer on the basis of two matching shares for every partnership share bought; free shares given without charge by the employer up to a maximum of £3000 per year.
Shares obtained in this way receive dividends and employees are accorded the normal rights of a shareholder. If the shares are held for a minimum of five years they are free of capital gains tax. See EMPLOYEE SHARE OWNERSHIP PLAN. See also EXECUTIVE SHARE OPTION SCHEME.