The GC100 and Investor Group has issued a revised version of its Directors' Remuneration and Reporting Guidance which replaces the version published in 2013.

New regulations came into effect governing the preparation of the remuneration report of quoted companies in October 2013. These provided that the remuneration report must include two separate sections – the remuneration policy and the implementation report, gave shareholders a binding vote on companies' remuneration policies and introduced a new range of disclosures such as the 'single total figure' of directors' pay. In September 2013 the GC100 and Investor group published the Directors' Remuneration Reporting Guidance to assist companies and their investors to interpret the new regulations. (See our previous article for more information).

The guidance is designed to offer a practical approach to implementing the regulations and to help promote engagement between companies and investors. It suggests 'best practice' for investors and companies and encourages disclosures that are appropriate and relevant rather than boilerplate disclosures.

The revised guidance makes some changes:

  • guidance surrounding the use of commercial sensitivity as a basis for not disclosing performance targets has been expanded
  • more clarity has been given on the matter of remuneration committees exercising discretion so that remuneration outcomes are balanced with managements performance and shareholder expectation
  • a meaningful comparator group should be chosen when reporting on the percentage change in the CEO's remuneration not a narrow group of senior managers
  • maximum salary, including each component of remuneration, should be disclosed and explained for each executive director in the future policy table
  • companies should consider making a nil return in the remuneration report where no payment to past directors or for loss of office have been made.

The full revised guidance can be found here.