Wednesday, 13 March 2013

UK: Remuneration reporting and voting - further consultation on draft legislation and debate in Parliament

The Department for Business, Innovation and Skills has published for consultation a second draft of the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013: see here (pdf). These Regulations bring about new disclosure requirements in respect of remuneration including a summary statement by the chairman of the remuneration committee, a report concerning remuneration in the last financial year and a statement of remuneration policy. Further background information is available here.

The provision introducing the new binding shareholder vote in respect of remuneration policy is contained within the Enterprise and Regulatory Reform Bill (see clause 71) that is currently before the House of Lords, and which was debated earlier this week at report stage: see here. Several amendments to clause 71 were tabled (but not passed) including requiring the new binding shareholder vote on remuneration policy to be held annually and made subject to a higher voting threshold (a special resolution rather than an ordinary resolution). As presently drafted, the binding vote would be held once every three years where policy remains unchanged; changes to policy would require shareholder approval by way of an ordinary resolution.

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