Gusto Group has taken an innovative approach to employee ownership by issuing Enterprise Management Incentives (EMI), also known as ‘growth shares’ to all 150 employees ahead of their planned transition to an Employee Ownership Trust (EOT) in March 2027. The move demonstrates how different employee ownership structures can work in tandem to deepen engagement and create financial value for workers.
The Gusto Approach
The £25 million group distributed growth shares to their entire workforce in the lead-up to their annual Gusto Fest celebration last June, with all employees from new starters to long-serving team members receiving allocations. The company plans to extend this to new joiners over the next nine to twelve months, ensuring broad participation before the EOT transition.
Chairman Steff Wright framed the decision as the "ultimate alignment of benefit and responsibility," viewing it as the natural progression of their journey to engage, empower, and reward their people. To reinforce collective ownership, employees will have opportunities to sit on the trust board, ensuring representation across all parts of the business.
Early feedback has been overwhelmingly positive, with employees highlighting increased motivation, job security, and tangible financial benefits. From planning holidays and home improvements to saving for house deposits, staff are already thinking about how their ownership stake will impact their lives.
Why EMI Matters for Employee-Owned Businesses
While EOTs have become increasingly popular since their introduction with tax advantages in 2014, EMI schemes offer complementary benefits that employee-owned companies should consider:
Tax Efficiency for Participants
EMI shares benefit from significant tax advantages. Employees typically pay no income tax or National Insurance when shares are granted, and if structured correctly with growth shares, they only benefit from value created after the grant date. When shares are eventually sold, gains may qualify for Business Asset Disposal Relief (formerly Entrepreneurs' Relief), reducing Capital Gains Tax to 10% on the first £1 million of gains.
Bridging to Full Employee Ownership
For companies planning an EOT transition, EMI schemes can serve as a bridge, allowing employees to build wealth from company growth during the transition period. This creates an immediate sense of ownership while the longer-term EOT structure is being established.
Focusing on Growth
Growth shares, a type of EMI option, only deliver value if the company grows beyond a specified threshold. This aligns perfectly with employee ownership principles by ensuring everyone benefits from collective success. Gusto's approach incentivizes their team to drive growth in the run-up to the EOT transition.
Flexibility in Participation
Unlike EOTs where the trust typically holds shares on behalf of all qualifying employees, EMI schemes can be tailored to include specific groups or phased rollouts. This can be useful during transition periods or for companies wanting to test employee ownership concepts before committing fully.
Cultural Transformation
The issuance of shares creates a powerful symbolic moment. Gusto's distribution of "Employee Owner" hats at their company festival demonstrates how share ownership can be celebrated and embedded into company culture, making abstract concepts tangible.
Considerations for Other EO Companies
Companies considering this dual approach should be aware of certain requirements and limitations:
Eligibility criteria: EMI schemes have specific qualifying conditions around company size, trading activities, and employee working hours
Valuation requirements: Shares must be properly valued, typically requiring professional valuation services
Timing considerations: The interaction between EMI schemes and EOT transitions needs careful planning to maximize tax benefits
Communication is crucial: Gusto's success stems partly from clear messaging about what ownership means, avoiding confusion between immediate EMI benefits and longer-term EOT advantages
A Growing Trend?
Gusto Group's approach suggests a maturing employee ownership sector that's willing to combine different structures for maximum impact. As one Rototek employee with 25 years' service noted, receiving shares feels like recognition of the effort that built the company's success—exactly the sentiment that drives the employee ownership movement.
For established employee-owned businesses or those planning to transition, EMI schemes represent an additional tool to deepen ownership culture, reward contribution, and align everyone around growth. The question for the sector is whether more companies will follow Gusto's lead in viewing employee ownership not as a single destination, but as a journey that can incorporate multiple structures along the way.
For companies considering EMI schemes alongside employee ownership structures, professional legal and tax advice is essential to ensure compliance and maximize benefits for all parties.