March 20, 2013
UK Revises Draft of Executive Pay Disclosure Regulations
– Broc Romanek, CompensationStandards.com
As noted by Towers Watson’s Katharine Turner in this blog:
On March 8, the U.K. Department for Business, Innovation and Skills (BIS) published an updated draft of the new reporting regulations for executive remuneration. While the framework for the new disclosures remains largely unchanged, the revised draft includes some welcome clarifications and refinements, as well as some provisions that will raise the disclosure bar even further, including:
– New requirements for the disclosure of bonus performance targets
– Updated proposals to require two separate charts, one showing total shareholder return (TSR) and one showing CEO pay for five years initially, increasing to 10 years over time
– A requirement that companies disclose their recruitment policies, including a maximum salary amount (expressed as a percentage of pay for the highest paid executive).BIS has asked for comments on the revised draft regulations by March 25, with final versions of both the updated Companies Act provisions and the reporting regulations expected in May. The new reporting regime will be effective as of October 1, 2013.
Our recent U.K. Executive Compensation Market Watch provides a detailed summary of the changes, along with an overview of the new reporting regime, a sample structure for a new form of remuneration report, next steps and summary tables on all the disclosure requirements.