Directors' remuneration areas of focus

All companies, except those that are small, are required to make certain disclosures about the aggregate remuneration of the directors. Quoted (and, for periods commencing on or after 10 June 2019, traded) companies are subject to considerably more onerous requirements involving preparation of a directors’ remuneration report including detailed information about each director’s remuneration.

New requirements introduced by The Companies (Miscellaneous Reporting) Regulations 2018 came into force for accounting periods beginning on or after 1 Janury 2019. 

For December 2020 year end reporters, further new requirements introduced by the Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019 (SI 2019/970) (the 2019 Regulations), come into force.  These Regulations which partially implement the Shareholders Rights Directive extend the scope of remuneration reporting to include unquoted traded companies and introduce new requirements in respect of the directors’ remuneration policy and the directors’ remuneration report.  In particular the remuneration report must now include:

  • a comparison of the annual change of each director’s pay to the annual change in average employee pay, over a rolling five year period.
  • the split of fixed and variable pay for each director, as two additional columns to the existing ‘Single Figure’ table.
  • any changes made to share options granted or offered and the main conditions for the exercise of these rights including the exercise price and date, compared to the previous year.

The changes in the 2019 Regulations to the requirements for quoted companies on the remuneration policy apply in respect of any new policy brought to shareholders for approval on or after 10 June 2019, while the changes to remuneration reporting take effect in respect of financial years starting on or after 10 June 2019.

In June 2019 the government published some guidance and answers to frequently asked questions about these regulations. The GC 100 and Investor Group has also published updated guidance to assist directors of quoted (and, for periods commencing on or after 10 June 2019, traded) companies to apply the requirements.

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Latest Resources

Accounting roundup — Closing Out 2021

16 Dec 2021

Closing Out 2021 discusses the principal corporate reporting issues arising in respect of 31 December 2021 annual reports, covering areas of regulatory focus identified in the FRC’s Annual Review of Corporate Reporting 2020/2021, issues arising from climate change including new and forthcoming climate-related disclosures and developments in reporting standards.

Governance in focus — On the board agenda 2022

03 Dec 2021

As 2021 draws to a close, our annual review of board topics will stimulate your thinking and help prepare you for the year ahead. Across the board, expectations of business are rising and it is this demanding environment which shapes the articles in this year’s publication.

Investment Association publishes updated Principles of Remuneration

24 Nov 2021

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

Governance in brief — FRC issues advice on annual reports for 2021/22 reporting season

11 Nov 2021

The FRC issues advice on annual reports for 2020/21 reporting season

FRC publishes findings on the quality of corporate reporting in 2020/2021

27 Oct 2021

The Financial Reporting Council (FRC) has published its Annual Review of Corporate Reporting 2020/2021. The report sets out the FRC’s expectations of areas of corporate reporting that require improvement and highlights the ten most frequently raised topics where improvements to reporting quality are needed.

Annual report insights 2021 — Surveying FTSE reporting

26 Oct 2021

Our latest annual reporting survey, Annual report insights 2021, provides insights into practices in annual reporting, focusing on areas where requirements have changed, where regulators are focusing or where innovative practices are emerging.

FRC publishes research report on changes in remuneration reporting

17 May 2021

The Financial Reporting Council (FRC) has published the results of new research carried out by the FRC and the University of Portsmouth. The report examined the remuneration policy disclosures of a sample of FTSE 350 companies during periods both before and after the introduction of the UK Corporate Governance Code 2018 ( ‘the Code’).

Governance in focus — On the board agenda 2021

10 Dec 2020

As 2020 draws to a close, our annual review of board topics will stimulate your thinking and help prepare you for the year ahead.

Accounting Roundup - Closing Out 2020

10 Dec 2020

Closing Out 2020 discusses the significant corporate reporting issues relevant to 31 December 2020 annual reports, covering areas of regulatory focus identified in the FRC's annual review of corporate reporting 2019/20, issues arising from the COVID-19 pandemic and the current economic environment and developments in reporting standards and areas of investor interest.

Investment Association publishes updated Principles of Remuneration

10 Dec 2020

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

Annual report insights 2020-Surveying FTSE reporting

29 Oct 2020

Our latest annual reporting survey, Annual report insights 2020, provides insights into practices in annual reporting, focusing on areas where requirements have changed, where regulators are focusing or where innovative practices are emerging.

Accounting Roundup - Closing Out 2019

10 Dec 2019

Closing Out 2019 discusses the significant corporate reporting issues relevant to 31 December 2019 annual reports, covering areas of regulatory focus identified in the FRC’s Annual Review of Corporate Reporting 2018/2019 and the ESMA’s common enforcement priorities for issuers in the European Union, together with other developments in reporting standards and areas of investor interest.

Investment Association publishes updated Principles of Remuneration

11 Nov 2019

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

GC100 and Investor Group issue updated directors' remuneration reporting guidance

01 Aug 2019

The GC100 and Investor Group has published updated guidance ("the guidance") to assist directors of listed companies to apply the directors’ remuneration report requirements set out in The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 ("the regulations”) as amended.

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").

Need to know — Government publishes new company reporting requirements for private and public companies in response to its consultation on Corporate Governance Reform

21 Jun 2018

The Companies (Miscellaneous reporting) Regulations 2018 (the draft Regulations) have been laid before Parliament and make the legal changes necessary for the Government’s package of corporate governance reforms announced by the Department for Business, Energy and Industrial Strategy (BEIS) in August 2017.

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.

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