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Employee Share Options: Be careful what you promise

01 October 2025

The High Court has ruled in favour of a Claimant that retained share options after termination following his reliance on promises made by his former employer.

The recent High Court ruling of Andrew Dixon v GlobalData Plc [2025] EWHC 2156 (Ch) has underlined the importance of obtaining legal advice on settlement agreements, particularly where an employee has share options. 

Under this case, the Court found that the CEO of GlobalData plc did not exercise his discretion to extend the employee’s share options beyond termination of his contract. It also found that the company’s rules for share options prevented an employee from claiming loss as a result of departure from post. And yet, the company was still obliged to compensate the employee because of assurances about those options. The reason? The legal concept of proprietary estoppel.

What happened?

Six years after Andrew Dixon left his employment, he sought to exercise share options that would ordinarily have lapsed on his departure. After such a long time, the company had migrated its systems to Microsoft 365 and so had no record of Mr Dixon’s settlement agreement. It also had removed him from their spreadsheet of employees with share options. So, when Mr Dixon attempted to exercise his option, the company denied his request outright.

Years before, Mr Dixon was notified that his employment was to be brought to an end because of a failure of his team to meet company performance targets. Mr Dixon complained about his treatment, which led to a discussion and agreement with the then CEO. They agreed:

  • Dixon would stay at the company three months longer than originally intended; 
  • he would not work for competitors for four months after the cessation of his contract; and
  • he would retain his share options and they would be added to the settlement agreement.

What did the High Court say?

Mr Dixon brought a claim at the High Court to try to assert his rights over the share options. The rules governing the options provided that the options would ordinarily lapse on termination of employment, but could be extended by an exercise of discretion. In the Court’s view, the then CEO had no actual authority to grant an extension of the options beyond the end of Mr Dixon’s employment. The Court also found that the CEO had not in fact tried to exercise any discretion to make this extension, and that Mr Dixon could not rely on the CEO having ‘ostensible’ authority to do so.

In making this finding, the Court rejected Mr Dixon’s primary case that he was denied options validly granted to him and that he was allowed to retain following termination of his employment with the Defendant in accordance with agreement with the CEO at the time and as documented in the settlement agreement. 

The rules governing the share options explicitly protected the company from an employee claim that they had suffered loss from the cessation of their employment. These rules were not, however, considered to be relevant in relation to Mr Dixon’s proprietary estoppel claim. 

What is Proprietary Estoppel?

This legal concept prevents a party from denying another’s rights to property when 
(1) a clear assurance or representation is made about rights to property; 
(2) the claimant relies on that assurance to their detriment; and 
(3) it would be unconscionable for the party who made the assurance to go back on it.

How did it apply to this case?

There was no actual exercise of discretion by the Defendant to allow the share options to continue beyond the term of Mr Dixon’s employment. However, the CEO’s discussion and subsequent agreement with Mr Dixon did create a legal obligation that bound the company as a whole. 

Mr Dixon suffered a detriment as a result of his reliance on the terms of the settlement agreement, which included restrictive covenants that prevented him from working for a competitor for a period post-employment and had continued in his employment with the Defendant for longer than originally planned. 

Taken together, the settlement appeared to extend the life of share options in exchange for an agreement not to work at competitors’ firms. Mr Dixon in evidence said he had been previously headhunted and was confident he would otherwise have been able to find work in the industry elsewhere. Instead, because of the agreement, he did not and therefore acted to his detriment.

It was decided that this meant Mr Dixon has a right to the share options beyond the term of his employment on the same basis as if he had continued to be employed by the Defendant. A further hearing has been ordered to determine the remedy for Mr Dixon's successful claim.

Settlement agreements and getting advice

This case highlights the importance of document retention and careful consideration of what is agreed between the parties on termination of employment. The Court found the verbal assurances by the CEO bound the company years later notwithstanding the specific terms of the option agreement. The application of the principle of proprietary estoppel to share options shows that companies and executives need to take care to be clear when negotiating terms of any settlement as any obligations on the employee (such as restrictions on employment) are likely to be seen as made in exchange for proprietary rights in those options. This case shows those rights may continue a number of years after the employment contract ends. It is also important for an employee when negotiating a settlement involving share options that any discretion exercised by the company should be formally agreed in writing and executed by the company.  If you would like further advice about accounting for share options in settlement discussions – or any other connected matter – then please contact our specialist Tax team or your usual DWF contact.  

Thank you to Douglas Pyrke and Nick Robson-Hill for contributing to the production of this article.

Further Reading