Academic journal article Manager

Draft Rules on Pay Reports Unveiled

Academic journal article Manager

Draft Rules on Pay Reports Unveiled

Article excerpt

The Government has published new draft regulations for compiling company pay reports, designed to streamline requirements, drive shareholder engagement, and make the link between pay and performance more transparent.

From October 2013 the change means businesses would need to produce two thorough reports, including reporting directors' combined pay as a single figure.

A "forward-looking policy report" would first detail every element of potential director pay individually, clearly linking them to strategic objectives and how performance is measured. This would outline scenarios for both exceeding and undershooting performance, include information on the percentage change in profit, dividends and overall remuneration, and set out principles for linking any exit payments to performance.

It would also outline all factors taken into account when deciding on a pay policy, including the views and earnings of the company's employees.

A second, subsequent report would then detail how the policy had been implemented, including the single pay figure for directors, encompassing bonuses, long-term incentives and pension provision.

This would also analyse company performance against conditions - assessing how it had impacted pay, and comparing it to Chief Executive pay - provide information about who had advised the remuneration committee in setting the policy and give details of how shareholders had voted at the previous AGM.

The first policy report would also be subject to a binding shareholder vote, and companies would need to submit it for a further vote if they ever wished to alter it.They would not be able to approve payments outside of its scope, including exit payments, and the vote would be compulsory every three years regardless of changes. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.