Changes to directors' remuneration regime

Once passed (expected this Summer), the legislative regime will essentially revert to the pre-2019 position. This will allow payments to directors that do not comply with the existing shareholder approved directors’ remuneration policy to be approved separately by an ordinary shareholder resolution (with a memorandum issued to shareholders in advance to set out the terms of, and rationale for, the payment). Currently, the whole directors’ remuneration policy must be changed to accommodate any such payments.

As part of the ongoing overhaul/review of non-financial reporting, the new disclosure regime would remove most of the disclosures that were added to implement the revised EU Shareholder Rights Directive into the UK in 2019, and would apply to financial years beginning after this Summer. Key changes include the removal of the requirement to disclose comparisons of annual changes in director salaries (or fees), benefits and bonuses with those of employees over a five-year period, the split of fixed and variable remuneration awarded to each director and any post-grant changes to the
exercise price of share options. Remuneration reports plus additional summary information about the most recent remuneration-related shareholder votes would also no longer be required to be made available on websites.