Commentary on Sections Overview Part 2: General requirements Paragraph 10: No preferential treatment for directors and senior employees
2974.This paragraph provides that the SIP must not have the effect of conferring benefits mainly on directors or more highly paid employees. It derives from paragraph 10 of Schedule 8.
2975.Sub-paragraphs (2) and (3) contain the material that is presently in paragraph 10(2) of Schedule 8. The material has been divided in order to make it easier to follow and to understand.
2976.In sub-paragraph (1) the words “no feature of the plan must have or be likely to have the effect” in paragraph 10(1) of Schedule 8 have been replaced by the words “no feature of the plan has or is likely to have the effect”.
2977.Sub-paragraph (4) sets out, in full, the proposition that is contained in paragraph 10(3) of Schedule 8, instead of providing a reference to paragraph 9(3) of that Schedule.
2978.Sub-paragraphs (1)(b) and (3)(a) now refer to “the higher or highest levels of remuneration”. These changes have been made to achieve greater alignment in the legislation: in this case an alignment with paragraph 8(1)(b) of Schedule 3.