The Department for Business Innovation and Skills (BIS) has published consultation and draft regulations on revised executive remuneration reporting requirements.
Shareholders will get an annual binding vote on remuneration policy unless companies choose to leave their pay policy unchanged, in which case there must be a vote as a minimum every three years. Under the proposed regulations, the directors’ remuneration report would contain two elements:
- a policy report, where there is to be a shareholder vote on remuneration policy. This would cover all elements of remuneration policy and the key factors taken into account in setting the policy, for example information on service agreements, exit payments and directors’ incentives; and
- an annual report showing how the policy was implemented in the last year, setting out actual payments made to directors and details on the link between company performance and pay. This will include exit payments made during the year, the total remuneration figure for each director and information about who has advised the remuneration committee.
Consultation will close on 26 September 2012.