This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

Directors' remuneration

All companies, except those that are small, 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.

A quoted company is defined in section 385 of the 2006 Act. It is a company whose equity share capital is listed in the UK or another EEA state or is admitted to dealing on either the New York Stock Exchange or NASDAQ. AIM companies and companies which have only debt or non-equity share capital listed do not, therefore, fall within the scope of the requirement to prepare a directors’ remuneration report.

In July 2018, The Companies (Miscellaneous Reporting) Regulations 2018 were approved Parliament. The Regulations make the legal changes necessary for the Government’s package of corporate governance reforms announced by BEIS in August 2017. The Regulations make changes to reporting of directors’ remuneration for quoted companies:

  • All quoted companies with more than 250 employees are required to publish the ratio of their CEO’s ‘single figure’ total remuneration to the median, 25th and 75th percentile total remuneration of their full time equivalent UK employees in their directors’ remuneration report. The ratios will be calculated on a group-wide basis by reference to UK employees only.
  • The Annual Statement from the Remuneration Committee Chair will need to provide a summary of any discretion used.
  • The notes to the single-figure in the Annual Report on Remuneration will need to provide additional guidance on the impact of share price movements on the outcomes, and detail on whether discretion has been exercised to reflect share price movements.
  • In the next new remuneration policy, there will be a requirement to provide an illustration in the directors’ remuneration report of the impact of potential future share price increases on executive pay outcomes that are linked to performance periods of more than one financial year (e.g. LTIP awards), assuming share price growth of 50 per cent over the period.

The requirements of these Regulations are effective for financial years commencing on or after 1 January 2019.

GC 100 guidance

In September 2013, the GC100 and Investor Group published guidance to assist directors of listed companies to apply the directors’ remuneration reporting requirements under the new rules. This was updated in October 2013 to include minor amendments including a clarification of when the new requirements are applicable from. A further statement from the Group was published in December 2014 but this contained only minor clarifications.

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

Latest Resources

Government publishes guidance on new directors' remuneration regulations

14 Jun 2019

The government has published a set of answers to frequently asked questions on the Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019 (the Regulations).

Government approves legislation amending directors' remuneration requirements

30 May 2019

The Companies (Directors' Remuneration Policy and Directors' Remuneration Report) Regulations 2019 ("the Regulations") have been approved.

Government publishes draft legislation amending directors' remuneration requirements

15 Apr 2019

The Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019 (the draft Regulations) have been laid before Parliament.

Investment Association publishes updated Principles of Remuneration

28 Nov 2018

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

Governance in brief — BEIS issues legislation to deliver key corporate governance reforms

20 Jun 2018

The Companies (Miscellaneous Reporting) Regulations 2018 have been laid before Parliament. These represent the legislative strand of the Government’s package of corporate governance reforms announced by BEIS in August 2017.

Investment Association publishes updated Principles of Remuneration

06 Nov 2017

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

Government to set new legislation to take forward its corporate governance reforms

30 Aug 2017

The Government has set out its plans to move forward with its corporate governance reforms following its Green Paper issued last November and also the BEIS Select Committee inquiry into corporate governance which reported in April 2017.

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.

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”.

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.