Equity in UK sales offers: what RSUs, options, EMI, and growth shares actually mean

Equity in UK sales compensation packages takes several forms with materially different tax, vesting, and risk profiles. Knowing which instrument you're being offered and what it actually means is the difference between an equity package that pays meaningfully and one that pays nothing.

This piece walks through the four instruments most common in UK sales offers in 2026.

RSUs (Restricted Stock Units)

Most common at US-listed parent companies operating UK subsidiaries. Granted as a number of share units; vest over time (typically 4 years with a 1-year cliff); each vested share is taxable as employment income at vesting (PAYE plus NI applies).

What the offer letter says: 'X RSUs vesting over 4 years with a 1-year cliff'. The headline value is typically computed at the grant-date share price.

What it actually pays: depends on the share price at vesting (which can be higher or lower than grant), the company's tax-withholding mechanism (some companies withhold shares to cover the tax; some require employee top-up), and any post-vesting holding requirements.

The tax point: RSU vesting is a taxable income event at the share-price-at-vesting times share-count-vesting. UK higher-rate tax (40 percent) plus NI (2 percent over the upper earnings limit) means roughly 42 percent of the gross vest is tax. If the company doesn't withhold shares to cover, the employee owes HMRC the cash within the next PAYE cycle.

What to negotiate: if the grant is part of an offer, the share-count is what's negotiable. The vesting schedule and tax mechanism are typically standard. Ask how the company handles tax withholding; the sell-to-cover mechanism is the cleanest from the employee's perspective.

Unapproved share options

Common at UK SaaS not eligible for EMI scheme (typically because the company is too large, has a non-qualifying trade, or is a UK subsidiary of a non-UK parent). Granted as the right to buy a number of shares at a fixed strike price, exercisable subject to vesting.

What the offer letter says: 'X options at strike price Y, vesting over 4 years with a 1-year cliff'.

What it actually pays: the difference between the share price at exercise and the strike price, on the shares the employee chooses to exercise. The exercise itself is a tax event: the difference between exercise-time market value and the strike price is taxable as income (PAYE + NI). On subsequent disposal of the shares, any further gain is capital gains (CGT applies).

The tax problem: if the share price at exercise is materially above the strike price, the employee owes income tax at exercise even if they haven't sold the shares. This can produce dry tax charges where the employee owes HMRC cash they haven't realised. Many UK employees with unapproved options exercise late (close to expiry) and immediately sell, to minimise the dry-charge risk; this typically loses some upside but keeps the cash flow manageable.

What to negotiate: share-count and strike price (sometimes negotiable at offer stage, particularly at growth-stage companies). Vesting schedule typically standard.

EMI options

The most tax-efficient instrument for UK sales hires at qualifying companies. EMI (Enterprise Management Incentives) is a UK government scheme for SMEs that provides a favourable tax regime for share options. Granted similarly to unapproved options but with materially better tax treatment.

What the offer letter says: 'X EMI options at strike price Y, vesting over 4 years with a 1-year cliff'.

What it actually pays: at exercise, no income tax or NI is due (unlike unapproved options). On subsequent disposal of the shares, the entire gain is capital gains. Business Asset Disposal Relief (BADR, formerly Entrepreneurs' Relief) may reduce the CGT rate to 14 percent (rising to 18 percent on disposals from 6 April 2026, per HMRC announcements) for qualifying holdings. Even without BADR, standard CGT rates are typically lower than income-tax rates for sales-level salaries.

The conditions: the company must qualify for EMI (broadly: UK-resident, fewer than 250 employees, gross assets under £30m, certain trade restrictions). The employee must hold options for at least 24 months from grant to qualify for the most favourable tax treatment (with some exit-event exceptions). The total EMI grant per employee is capped (£250,000 of share value at grant date).

What to negotiate: share-count and strike price are most negotiable. Confirming the company qualifies for EMI is critical; some companies grant 'EMI options' that don't actually qualify, which produces a nasty surprise at exercise.

Growth shares

Sometimes used at growth-stage UK companies to grant equity-like upside without the tax complexity of options. Typically: a separate share class that participates in value above a defined hurdle (so no value at grant, but participation in upside above hurdle).

What the offer letter says: 'X growth shares with hurdle Y'.

What it actually pays: depends on company exit value and the structure of the growth-share class. Tax treatment is typically capital gains on disposal, but the structure varies and HMRC scrutiny on growth shares has tightened. Get specific tax advice before relying on the headline value.

What to negotiate: share-count and hurdle value (lower hurdle is more valuable to the employee).

What to do at offer stage

Three habits:

1. Identify the instrument explicitly. RSU? Unapproved option? EMI option? Growth share? The offer letter sometimes obscures this; insist on clarity.
2. Ask about the tax mechanism. RSU sell-to-cover? Unapproved-option dry-charge risk? EMI qualification? Growth-share HMRC clearance? The mechanism determines what the equity actually pays.
3. Confirm vesting acceleration on departure. What happens if you leave (good or bad leaver)? Some plans accelerate vesting on certain triggers; others claw back vested-but-unexercised options.

For the sums involved in senior UK sales offers, paying 200-400 pounds for a chartered tax adviser to review the equity component before signing is routinely worthwhile.

This is editorial coverage, not tax advice. Consult a chartered tax adviser for your specific position.