BIS has circulated a revised draft of the Directors’ Remuneration Report Regulations (The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013) (“the Regulations”) to certain interested parties involved in the consultation process and has said that it is happy for these to be circulated more widely given the short time-frame before implementation.
The Regulations are subject to final drafting amendments as part of the parliamentary scrutiny process. They are expected to be laid before Parliament in the next few weeks and will then be subject to Parliamentary approval (although no substantial amendments are expected at that stage). The Regulations will come into force on 1 October 2013 and apply first to companies with accounting years ending 30 September 2013. The changes made to the Companies Act 2006 to introduce new shareholder voting requirements, which are set out in the Enterprise and Regulatory Reform Act, also come into force on 1 October 2013.
The latest version of the Regulations builds on the version circulated by BIS in March 2013 covered in our March bulletin and the government’s formal consultation on directors’ pay and remuneration reporting reform in June last year covered in our July 2012 briefing.
We have summarised key changes in the revised draft Regulations compared to the draft version issued by BIS in March 2013. There are a lot of other smaller drafting changes and the contents have been re-ordered but, except as mentioned in our paper, the substance remains broadly unchanged.
The Regulations clarify a number of points which should make the new regime more effective, although there is still uncertainty in relation to how some of the provisions will work in practice and some additional information is now required which will inevitably make the disclosure process more onerous.