Awarding shares to employees will usually result in the dilution of the existing shareholdersʼ interests in the company. In a quoted company, the dilutive effect of a share scheme can be managed by buying shares in the market to recycle in the companyʼs share schemes. Share awards that dilute the existing shareholders are always subject to close scrutiny by shareholders, and company secretarial departments can end up devoting significant time and resources to managing and minimising the dilutive effect of share schemes.

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