In January, the government announced a new package of measures on executive pay, with proposals to:
- legislateto require directors’ remuneration reports to be separated into a section on the past year’s pay practice and a section future pay policy; to disclose the total remuneration of each director; to explain how their pay related to the company’s performance; and to explain how they have consulted with employees in forming future pay policy;
- consult further on proposals to reform shareholder voting on executive pay proposals, including the possibility of a binding shareholder vote on future pay policies, and the level of shareholder support necessary to approve pay proposals; and.
- ask the Financial Reporting Council to introduce clawback provisions in the remuneration arrangements of directors of listed companies and to stop the practice of a director of one listed company serving on the remuneration committee of another.
Full details are expected later this year. The changes are likely only to affect companies with a Premium Listing on the London Stock Exchange that are bound by the UK Corporate Governance Code.