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

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”.

IMA amends Principles of Remuneration

21 Oct, 2014

The Investment Management Association (IMA) has amended its Principles of Remuneration following the 2014 AGM season. The only change this year is around the use of “allowances” as a part of fixed pay.

FRC publishes updated UK Corporate Governance Code

17 Sep, 2014

The Financial Reporting Council (FRC) has today published an updated version of the UK Corporate Governance Code (the "Code"), along with two associated guidance documents and revisions to International Standards on Auditing (UK and Ireland) ("ISAs"). The revised Code and ISAs are applicable for periods commencing on or after 1 October 2014.

We comment on proposed revisions to the UK Corporate Governance Code

03 Jul, 2014

We have published our comment letter on the FRC's consultation on changes to the UK Corporate Governance Code. Overall, we support the proposed revisions to the UK Corporate Governance Code (“the Code”). Given the importance of implementing the Sharman principles without further delay, we have aimed to provide practical and specific comments on the proposals.

Deloitte comment letter on proposed revisions to the UK Corporate Governance Code

03 Jul, 2014

We have published our comment letter on the FRC's consultation on changes to the UK Corporate Governance Code. Overall, we support the proposed revisions to the UK Corporate Governance Code (“the Code”). Given the importance of implementing the Sharman principles without further delay, we have aimed to provide practical and specific comments on the proposals.

Directors' remuneration in FTSE 100 companies — the story of the 2014 AGM season so far

30 Jun, 2014

This review focuses on how shareholders are responding to the new style directors' remuneration reports and also includes some preliminary findings from our main report on directors' remuneration in FTSE 100 companies which will be published in September. There are some interesting trends emerging which suggest that shareholders are successfully influencing how directors' remuneration is structured . It is encouraging that this has tended to be the result of consultation prior to the vote rather than shareholders finding it necessary to use the vote to effect a change.

The new remuneration report — Second impressions

27 Jun, 2014

This publication from Deloitte shares our second impressions of how companies are addressing the new Directors' Remuneration Report requirements. Our review covers the reports of six FTSE 100 constituents with a financial year ending on 30 September 2013 and 47 of those with financial years ending in December 2013.

FRC consults on changes to the UK Corporate Governance Code

24 Apr, 2014

The Financial Reporting Council (FRC) has today published a consultation (“the consultation”) on proposed changes to the UK Corporate Governance Code (“the Code”). The proposed changes, if implemented, will apply to financial years beginning on or after 1 October 2014.

FRC bulletin highlights auditor’s responsibility in relation to the Strategic Report and the Directors’ Remuneration Report

10 Apr, 2014

The Financial Reporting Council (FRC) has today published a bulletin highlighting recent developments in UK company law, the UK listing rules and ISAs (UK and Ireland) that affect both the auditor’s responsibility and the wording of auditor’s reports on the financial statements.

European Commission proposes measures to enhance transparency and to improve shareholder engagement and corporate governance reporting

09 Apr, 2014

The European Commission has today announced a package to improve corporate governance for listed companies within the European Union (EU). The proposals aim to encourage long-term shareholder engagement and to improve corporate governance reporting by listed companies.

FRC issues reminders for the reporting season

03 Feb, 2014

The Financial Reporting Council (FRC) has issued a summary of key findings from reports produced by the Financial Reporting Lab which companies should be addressing during the current reporting season.

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