Share schemes focus on senior staff Businesses have been increasing share option schemes for senior managers while reducing those for junior employees - in spite of government calls to boost broader employee ownership, according to a new survey. Such schemes help employees to own shares in their company, either by providing them directly with share options or helping them save up to buy shares at a discounted price. Employees do not have to pay income tax or national insurance contributions on the shares and savings, while gains from a disposal of shares acquired via the options are liable only to capital gains tax. The decline in schemes open to all employees is a blow to the government's attempts to encourage broader employee ownership. Nick Clegg, deputy prime minister has repeatedly called for increased employee share ownership, and has put forward ideas for a "John Lewis economy" in which staff will own stakes in companies they work for. UHY Hacker Young, the accountancy firm, said that last year 15 per cent, or 7,190, more companies offered Enterprise Management Incentive schemes - typically only available to senior staff - compared with the 6,240 companies offering similar schemes five years ago. At the same time the number offering options to all employees dropped by 23 per cent from 1,530 to 1,180. Roy Maugham, tax partner at UHY Hacker Young, said: "A tough financial climate means companies have to make difficult choices about which share option schemes they can offer. Businesses are increasingly choosing to close unattractive all-employee schemes but are keeping or expanding schemes open to senior management. They have made the judgment that it is much more important to attract and incentivise a few senior managers rather than numerous junior staff. "Given the tough financial climate many businesses are operating in, some businesses may also use share options to keep short-term costs down: offering long-term share options to senior staff may help reduce upward pressure on cash salaries and bonuses," he added. Paul Belsman, head of tax schemes at RSM Tenon, also pointed out that Enterprise Management Incentive schemes to retain senior key staff were boosted this week in the draft finance bill. Proposals would allow staff to qualify for the lower 10 per cent capital gains tax - rather than 28 per cent - on the sale of their shares. Share incentive schemes have the added benefit of rewarding long-term performance over short-term gain. Accountants say senior employees with a stake in long-term achievement may be inclined to take fewer risks than those whose reward packages are structured around short-term bonuses.