Question to the Department for Business and Trade:

To ask the Secretary of State for Business and Trade, if she will make an assessment of the potential impact of restrictions on equity dilution on the capacity of fast growing companies to recruit.

Share awards can provide an important recruitment incentive and help align employee interests with those of the company. UK company law permits the allotment of shares for employee share schemes without applying the pre-emption provisions that otherwise require newly issued shares to be offered to existing shareholders first to avoid equity dilution. The Financial Conduct Authority’s Listing Rules require shareholder approval of employee share schemes while allowing companies in unusual circumstances to allot shares to retain or recruit a director without such prior approval.