On 12 September 2013, the GC100 and Investor Group1 published their Directors’ Remuneration Reporting Guidance (‘the Guidance’) intended to help quoted companies comply with the new directors’ remuneration reporting requirements contained in The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 (‘the Regulations’). To cap: the new regime applies to the first directors’ remuneration report to be published during the company’s first financial year beginning on or after 1 October 2013.
The new-look directors’ remuneration report must include the following:
- an annual statement from the chair of the remuneration committee: this should summarize the major decisions on directors’ remuneration and any substantial changes made during the year, together with details of the context of the committee’s decisions;
the company’s forward looking-remuneration policy: this should include:
- a future remuneration policy table;
- an illustration of the application of that policy to the directors;
- the company’s policy on payment for loss of office;
- a statement regarding factors taken into account in deciding policy; and
- the views of shareholders in the formation of the policy.
The policy section need only be included in the report at threeyearly intervals unless circumstances demand otherwise (for example, on a change of policy in the interim); and
an annual report on the implementation of the company’s remuneration policy: this should include:
- a ‘single total figure’ table of remuneration for every person who was a director during the relevant financial year;
- details of awards made during the year under long-term incentive plans;
- a summary of the directors’ interests in shares;
- the percentage change in the remuneration of the chief executive officer;
- details of the members of the remuneration committee and the committee’s advisers;
- the results of shareholder voting on the directors’ remuneration report or policy at the last general meeting of the company; and
- a statement on how the company’s policy will be implemented in the following year.
The Guidance contains practical steps to help companies implement the new regime and to promote effective engagement with investors. Whilst the Guidance generally follows the provisions of the Regulations, it also recommends that companies make certain additional disclosures, with the aim of helping investors make betterinformed decisions. The Guidance will be reviewed from time to time as practice develops.
GC100 and Investor Group: Directors’ remuneration reporting guidance, 12 September 2013, is available at: