Directors' Remuneration

Collection of Directors' remuneration news and publications


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 by 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 made 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 were effective for financial years commencing on or after 1 January 2019.

In May 2019, the Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019 were made. The Regulations, which implement the requirements of the Revised Shareholder Rights Directive (SRD), came into force on 10th June 2019.  They amended the Companies Act 2006 and the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410) to extend the scope of remuneration reporting to unquoted traded companies and introduce new requirements in respect of the directors' remuneration policy and the directors' remuneration report.  This captures a small number of UK-registered companies whose shares are traded on regulated markets in the UK, but which are not on the FCA’s Official List.  The changes in the 2019 Regulations to the requirements for quoted companies on the remuneration policy are applicable in respect of any new policy brought to shareholders for approval on or after 10 June 2019, while the changes to remuneration reporting took 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.

GC 100 guidance

In July 2019, the GC100 and Investor Group published updated guidance to assist directors of listed companies to apply the directors’ remuneration reporting requirements under the new rules.

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.