Employee shareholding exclusion extends to staff holding limited company shares under ESOPs, preserving exemption from Central Government approval. Employees holding company shares acquired under employee allotment schemes, including Employees' Stock Option Plans or by way of qualification shares, and whose holdings remain within the small prescribed proportion of paid up share capital, are to be treated as persons not having any interest in the capital of the company for purposes of the Ministry's notification. Consequently, such employees fall within the category eligible for the exemption from obtaining Central Government approval for payment of managerial remuneration exceeding statutory limits.