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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