While we have extensive experience helping BP employees and alumni optimise their benefits, Emery Little operates independently and is not affiliated with or endorsed by the bp group, including BP Pension Trustees Limited and the BP Pension Fund. This allows us to provide objective, independent guidance focused solely on your best interests.
In 2020, BP launched its Reinvent strategy, a comprehensive plan to transition the company towards a more sustainable and low-carbon future.
As part of this, the Reinvent bp share plan was launched. If you were an employee at the time, it’s likely you are a member of this plan. If you were level F or above, you will have been granted some options.
This post will give you essential information about what these options are and how they work, ahead of the exercise window opening next year.
What are the ‘Reinvent bp’ share options?
An option provides you with the right, but not the obligation, to buy a share in the future at a pre-determined price. In the case of the Reinvent option, each option gives you the right to buy one bp share for £3.15 – this is known as the strike price. You can exercise this option during a six-year period starting on 11 March 2025.
You choose when to exercise your option during this period, and its value will depend on the share price as we move through the six years.
How do I understand the value of my options?
Let’s look at an example. Say it’s 12 March 2025, and the share price is £4.15. You hold 100,000 options. You can buy 100,000 shares for £3.15, which is £1 below the current share price. If you execute your option and immediately sell the shares, you would realise £100,000 gross. Therefore, your options are worth £100,000. We refer to options with a positive value as being “in the money”.
Your options’ value will rise as the share price goes up and fall as it goes down. If the share price goes below £3.15, they’ll be worthless – the option will be “out of the money”.
When you exercise an option that’s in the money, you won’t need to find the money to make the purchase yourself. This will be provided on the basis that you immediately sell the shares, leaving you with the profit, less costs and taxes. This is known as cashless exercise.
Tax considerations
Both income tax and National Insurance contributions are due on any profit made when exercising options. The capital gains tax position is straightforward, but only if you use cashless exercise, as this means you sell the shares the moment you acquire them. However, if you exercise the option and keep the shares, this will affect the pooled acquisition costs of any other bp shares you hold.
You should seek formal advice ahead of March 2025 if you’re unsure about your tax position. We can help direct you to a suitable accountant if needed.
Learning from the past: A cautionary tale
At Emery Little we have been serving BP employees and their families for over 30 years. We remember the experiences many went through with the share scheme set up after the Macondo spill in the Gulf of Mexico.
The exercise window opened with the share price above the strike price, but it then fell below it and didn’t recover until after the window closed. Those who held out for higher prices, having had an opportunity to exercise their options for a profit at the start, were left with nothing.
This caused understandable frustration for those affected. We want to help ensure no one faces the same situation with this next option.
How to avoid this mistake
- Understand your grant: check how many options you have and familiarise yourself with the exercise process ahead of time
- Set a reminder: you’ll want to know when the exercise window opens. Set a reminder for 11 March 2025 now
- Have a plan: knowing what an acceptable exercise price is for you takes the emotion out of exercising your options. Without this anchor point, the allure of “higher prices tomorrow” could cause you to hesitate. Put the work in today to make life easier for future you
If you’re finding the third point challenging, we can help. Whether you’re a current BP employee or have recently left the company, we’ll help you understand how your options fit into your overall finances. This enables you to make an informed decision when the time comes.
If you’re not already working with us, find out more about our service here.
Turning your ‘what ifs’ into ‘what nexts?’
Life’s true wealth isn’t measured in pounds, but in memories. At Emery Little, we specialise in turning financial uncertainty into a clear path forward. Our unique approach doesn’t just clarify your financial picture – it illuminates what’s possible in your life, turning vague “what ifs” into concrete plans. Partner with us to ensure your life story is one of “glad I did” rather than “wish I had”.
