Income Tax (Earnings and Pensions) Act 2003 Schedule 2 paragraph 10

No preferential treatment for directors and senior employees

Schedule 2 paragraph 10 requires that a Share Incentive Plan must not be designed or operated in a way that channels benefits predominantly towards directors or the most highly paid employees.

• No feature of the plan may confer benefits wholly or mainly on directors or on employees receiving the higher or highest levels of remuneration.
• Where the plan is established by a company within a group, the choice of participating companies must not result in benefits flowing predominantly to higher-paid employees or directors of group companies.
• These anti-avoidance rules apply both to standalone plans and to group plans involving multiple constituent companies.
• The awarding of free shares is not treated as breaching these requirements where it would also not breach the participation requirements of paragraph 9 (by virtue of paragraph 9(3) and 9(4)).