The Highs & Lows of Employer Shares

What’s It About

Owning shares in your employer or joining your employer’s share schemes such as Save As You Earn (SAYE), Enterprise Management Incentives (EMI) and Restricted Stock Units (RSUs) can lead to significant financial reward when the company is growing. A prime example is Amazon, who came to the UK in 1998. Employees of the ‘start up’ online bookstore were all given RSUs as a bonus to their basic pay, which at the time, were trading under $50 each. Those employees that continued to hold their shares to the time of writing would be sitting on a gain of over 60 times that value now, with each share worth over $3,000 (before HMRC takes up to 20% of the profit in Capital Gains Tax).

Of course, holding single shares of any company is highly risky, especially if that company is also the source of your regular income. Unexpected collapses from firms such as Northern Rock in 2012 demonstrate that holding too much of your wealth in a single source can be dangerous, with the share price taking a 31% tumble in a single day and ultimately becoming worthless.

In this presentation I discuss at a high level, the common topics our team of advisers get from our clients and more broadly from a recent LinkedIn poll open to my network asking ‘If you get given shares from your employer as part of your compensation, what would you like to know more about?’. With 79% of the votes, ‘When to Keep or Sell’ and ‘Tax Implications’ were the clear winners.

Speaking to an Independent Financial Adviser can help ensure you make the most of these schemes, by providing guidance on mitigating tax liabilities, ensuring you’re not taking too much risk, or over-investing.

What You’ll Learn

• Thought exercises on how to know when to hold or sell your employer shares
• Key tax considerations when holding or selling
• How an Independent Financial Adviser can help

Biography

I graduated from the University of Portsmouth in 2012 after studying Business Studies, including a year working at Microsoft's UK head office in Reading.

From there, I joined Amazon's then brand-new graduate scheme, as one of the two graduates on their Operations program. I stayed at Amazon, working across a range of roles in both their Fulfilment Centres and Head Office for nearly 10 years.

During the start of the Covid pandemic, I decided to begin studying for the numerous exams required to become a Financial Adviser. Once I had a few under my belt, I joined Lyndhurst Financial Management Ltd as a Paraplanner, providing technical support to their adviser team, across all areas they work on, including pensions, investments, insurance, and mortgages.

In 2022, after successfully completing all the exams needed, I am working in a technical role with Lyndhurst Financial Management. I'm now focused on helping clients make better financial decisions.