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Directors' remuneration

All companies (except those that are small from 1 January 2016 onwards) are required to make certain disclosures about the aggregate remuneration of the directors. Quoted companies are subject to considerably more onerous requirements involving preparation of a directors’ remuneration report including detailed information about each director’s remuneration. These requirements changed substantially for years ending on or after 30 September 2013.

The Directors' Remuneration report for a quoted company is completely different from the old-style report. A key aspect of this is the ‘single figure’ for the remuneration of each director which includes a value placed on share-based payments and pension benefits using calculations prescribed in the regulations.

The directors’ remuneration report for a quoted company is split into two parts.  In addition to the part dealing with historical remuneration (commonly known as the annual remuneration report), there is a ‘policy report’. This is subject to a binding shareholder vote and a company will be in breach of the law if it pays remuneration to directors outside of the approved policy. The policy report has to be put to a shareholder vote at least every three years.

Below is a comprehensive collection of helpful resources — organised chronologically — on Directors' remuneration.  Click for direct access to specific Directors' remuneration resources:

Latest Resources

Governance in brief — BEIS Select Committee inquiry report calls for reforms to the UK Corporate Governance Code and greater enforcement

25 May 2017

A next step in the corporate governance reform agenda has been the publication in April 2017 of the BEIS Select Committee inquiry report.

BEIS Select Committee publishes its report on corporate governance

06 Apr 2017

The Business, Energy and Industrial Strategy (BEIS) Select Committee has published its report following its inquiry and consultation on corporate governance launched in September 2016, recommending that action must be taken to address a lack of trust in business. Whilst the findings of the Select Committee are not binding on the Government, the proposals laid out in this report may be taken into consideration in any subsequent White Paper on Corporate Governance Reform.

Governance in brief — Government issues Green Paper on corporate governance reform

02 Dec 2016

The Department for Business, Energy & Industrial Strategy (BEIS) has issued a Green Paper seeking views on how to improve the UK corporate governance framework and setting out options for updating the framework and reforming executive remuneration. The aim of the Green Paper is to consider what changes might be appropriate in the UK corporate governance regime to help ensure that we have an economy that works for everyone

BEIS issues Green Paper on Corporate Governance

29 Nov 2016

The Department for Business, Energy & Industrial Strategy (BEIS) has issued a Green Paper seeking views on how to improve the UK corporate governance framework and setting out options for updating the framework and reforming executive remuneration. The consultation closes on 17th February 2017.

Investment Association publishes updated Principles of Remuneration

01 Nov 2016

The Investment Association (IA) has published its updated Principles of Remuneration ("the Principles").

Executive Remuneration Working Group report provides recommendations to rebuild trust in executive pay

27 Jul 2016

The Executive Remuneration Working Group, established by the Investment Association, has published a report which provides ten recommendations to “rebuild trust in executive pay structures in the UK”.

Governance in focus: Audit committees in 2016 — refocusing the agenda

13 Jul 2016

Another reporting and AGM season is over but as we approve interim results, inevitably we look at agendas for the rest of the year. At our Centre for Corporate Governance we want to help you set your agenda, which is why we have provided you this half year round-up of areas your audit committee will need to consider during the remainder of your meetings in 2016 and into 2017.

Aditi Gupta, Jenny Chu and Xing Ge: Form Over Substance? An Investigation of Recent Remuneration Disclosure Changes in the UK

06 Jul 2016

This paper analyses how UK-incorporated FTSE 100 companies have responded to the 2013 changes in UK company law that increased the level of disclosure required in directors' remuneration reports.

Be careful what you wish for - Simplifying executive pay

15 Apr 2016

In a few weeks’ time we expect the Investment Association Working Group to publish proposals for a ‘radical simplification’ of executive pay arrangements For some years media commentators, investor bodies and some investors have vilified the complexity of pay arrangements for company directors. Simple but effective remuneration is the Holy Grail of the executive remuneration world. But it is not entirely clear what is meant by complexity and it is not certain that this is the real problem. The real problem as we see it, is not really about complexity, but about making sure that the pay of directors is fair and transparent to the directors themselves, shareholders and to the outside world. This publication explores the complexity of the real problem and analyses the individual elements of the remuneration package to determine what structure would be best for companies.

GAAP 2016: Model annual report and financial statements for UK listed groups

01 Apr 2016

GAAP 2016 Model annual report and financial statements for UK listed groups provides comprehensive guidance on the presentation and disclosure requirements for company reporting that will apply to listed groups for 2015/16. The book is based on legislation (the Companies Act 2006) and regulation in issue as at 15 October 2015 which is effective for years beginning on or after 1 January 2015.

PLSA issues Policy and Voting Guidelines 2015/16

12 Dec 2015

The Pensions and Lifetime Savings Association (PLSA, formerly the National Association of Pension Funds (NAPF)) has issued its Corporate Governance and Voting Guidelines for 2015/16.

Investment Association publishes revised Principles of Remuneration

16 Nov 2015

The Investment Association (IA) has published its revised Principles of Remuneration.

Directors' remuneration in FTSE 100 companies — the story of the 2015 AGM season so far

20 Oct 2015

The second year of reporting under the new disclosure regulations is now in full swing and over two-thirds of FTSE 100 companies have published their directors' remuneration report so far in the 2015 AGM season. This represents companies with financial years ending on or after 30 September 2014 up to and including those with years ending in January 2015. Over 80% of these companies have already held their 2015 AGM. In this review we focus on how shareholders are responding to the second year of reporting under the new regulations and we also include some preliminary findings from our main report on directors' remuneration in FTSE 100 companies, which will be published in the autumn.

NAPF publishes its 2015 AGM report

24 Sep 2015

The National Association of Pension Funds (NAPF) has published its 2015 AGM report (“the report”). This is published in advance of the NAPF updating its Corporate Governance Policy & Voting Guidelines which “aim to assist investors, and their proxy voting agents, in their interpretation of the provisions of the Corporate Governance Code and in forming judgements on the resolutions presented to shareholders at a company’s AGM”.

JURI approves proposals to enhance transparency between pay and performance and improve shareholder engagement in listed companies

10 May 2015

The Legal Affairs Committee of the European Parliament (JURI), which is the committee responsible for changes in the legal requirements around company reporting, has approved new draft legislation which, among other things, aims to enhance transparency between pay and performance and improve shareholder engagement in listed companies.

The Bruce Column — Looking to the corporate horizon

07 May 2015

Sir Win Bischoff has completed his first year as Chairman of the Financial Reporting Council and it is clear that he wants corporate governance in the UK to take a much more long-term view. Our regular, resident columnist, Robert Bruce, interviewed him.

Robert Bruce interviews — Insights from Sir Win Bischoff

07 May 2015

In this interview Robert Bruce catches up with Sir Win Bischoff, Chairman of the Financial Reporting Council. He has just completed his first year as Chairman and he talks about the way the FRC is embarking on a programme to make corporate UK much more long-term in outlook and culture. He talks about ‘tone from the top’, encouraging a long-term outlook and how the new viability statement will work, and how the focus on remuneration should change. He talks about the decline of boards, the rise of committees, and succession planning. He talks about explaining business to the outside world and the importance of value creation, how to get regulation right, and about women on boards and how to increase diversity.

BIS publishes paper on how companies have responded to directors’ remuneration reporting requirements

10 Mar 2015

The Department for Business, Innovation and Skills (BIS) has published a paper considering how companies and shareholders have responded to new requirements on the reporting and governance of directors’ remuneration introduced in the Large and Medium-Sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 (“the Regulations”).

GC100 issues supplemental guidance on Directors’ Remuneration

09 Jan 2015

The GC100 and Investor Group (“the Group”) has published a ‘2014 Statement” (“the 2014 Statement”) which provides supplemental guidance to the 2013 GC 100 and Investor Group Directors’ Remuneration Reporting Guidance (“the 2013 Guidance”).

BIS publishes progress report on the implementation of the recommendations of the Kay review

30 Oct 2014

The Department for Business, Innovation and Skills (BIS) has published a report (“the progress report”) detailing the progress made in implementing each of the 17 recommendations outlined by Professor Kay in his review of the UK Equity market in 2012 (the “Kay Review”). The progress report highlights that “good progress” has been made but that “more needs to be done”.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.