SIPs—requirements relating to the trust and the trustee

Copyright © 2025 LexisNexis
Produced in partnership with Jonathan Fletcher Rogers of Addleshaw Goddard
Practice notes

SIPs—requirements relating to the trust and the trustee

Copyright © 2025 LexisNexis

Produced in partnership with Jonathan Fletcher Rogers of Addleshaw Goddard

Practice notes
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The share incentive plan (SIP) legislation is very prescriptive in relation to the nature of the trust that is required to operate in conjunction with a SIP, and the permitted rights and obligations of the trustees. Therefore, it is likely that the introduction of any new SIP will also necessitate the establishment of a new trust at the same time. This Practice Note looks at what requirements apply to SIP trusts as well as the trustees of such trusts.

Requirement for trustees

The trust is a key element of the SIP. In order to operate a SIP, it must provide for the establishment of a body of trustees consisting of persons resident in the UK. Therefore, each and every person acting as trustee, whether an individual or a corporation, must be resident in the UK.

Most publicly listed companies operating SIPs have a single professional corporate trustee but the trustees can also be a collection of at least two individuals or a subsidiary of the company.

Requirement for a trust and trust

Jonathan Fletcher Rogers
Jonathan Fletcher Rogers

Addleshaw Goddard

Jonathan is the head of Addleshaw Goddard's Employee Incentives and Remuneration practice, and advises UK and multinational clients on the design and implementation of share and cash-based employee incentive plans. He also advises quoted companies on corporate governance and disclosure issues in relation to remuneration. Jonathan is a regular speaker at conferences on executive remuneration and share plans more generally and has been recognised as a leading individual in employee incentives in Chambers and Partners.

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Jurisdiction(s):
United Kingdom
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Key definition:
Requirements definition
What does Requirements mean?

A DCO should include “Requirements” to which the development authorised by the DCO is to be subject. Similar to planning conditions, a requirement specifies the matters for which detailed approval needs to be obtained before the development can be lawfully begin.

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