Assurances by CEO bind Company to extend share options post-employment

December 10, 2025

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Assurances by CEO bind Company to extend share options post-employment

The importance of obtaining legal advice on settlement agreements where employees have share options, was highlighted in the High Court case of Dixon v GlobalData Plc [2025] WEHC 2156 (Ch). 
Facts In this case Mr Dixon had worked for his employer for nine years between 2006 and 2014, during which time he had been granted share options in the parent company. 
Mr Dixon agreed to extend the date his employment would terminate by three months, and agreed to be bound by post termination restrictions, relying on an assurance given by the CEO of the parent company that he could retain his share options after leaving (usually, under the terms of the share option scheme, they would lapse at the time his employment terminated). The parties entered into a settlement agreement to record these terms; however, the parent company took no steps to exercise its discretion to extend the share options. 
Several years later Mr Dixon sought to exercise his share options, but the company refused, claiming they had lapsed on termination of his employment. 
Mr Dixon brought a claim in the High Court. 
Decision The High Court found that, whilst the share option scheme rules provided discretionary extension power which would have allowed for options to continue after termination, these had not been exercised formally by the company and the CEO was not authorised by the Board to exercise this power. 
An alternative argument put forward by Mr Dixon was through the doctrine of proprietary estoppel (a legal principle preventing a party from reneging on a promise or assurance in respect of land or property, when the other party has relied on that promise or assurance to their detriment). The High Court found that assurances had been given to Mr Dixon by the CEO that, if he remained in employment for a further few months then, following the termination of his employment, he would be entitled to exercise his share options on the same basis as if he were employed. Mr Dixon had relied on this assurance, it was reasonable for him to have done so, this assurance was to his detriment, and the Court held it would be “unconscionable” for the company to renege on the promise. 
As such, Mr Dixon’s claim succeeded. 
Takeaway Points This case highlights the importance of accurately reflecting the terms that have been agreed between the parties on termination of employment (both those agreed verbally and in writing). Where it is proposed that discretion be exercised contrary to default terms of a company scheme, in this case a share option scheme, ensure authority is obtained in advance from the appropriate person(s) and that effect will be given to formally exercise the commitment. 
It is also important for businesses to be aware that any representations or assurances given by members of the senior management team could, subsequently, be relied on by an employee. 

If you’d like advice tailored to your situation, contact Nicola Cockerill on 0800 915 7777 or email nc@kilgannonlaw.co.uk .

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