Growth shares are a separate class of share that participate in equity value above a defined hurdle. They have very limited value at issue (because the hurdle reflects current value plus a margin), but capture future growth above that level. They are commonly used by UK companies that cannot use EMI or want to incentivise non-employees.
When is it required?
- Companies above EMI thresholds (gross assets, employees, trading activity).
- Non-employee participants such as advisers, contractors and board members.
- Group / subsidiary incentives that need to track a specific business unit.
Our methodology
We model growth shares as a call option on the company's underlying equity, with Black-Scholes / Monte Carlo pricing inputs (volatility from listed comparables, time to liquidity, dividend yield, risk-free rate) and discounts for marketability and minority status.