Although this regulation on companies directors’ remuneration is not an employment law issue, it may be in the scope of responsibilities of some HR professionals and employers and so we have included the following points for awareness:
These companies regulations were brought into force on the 10th June 2019. They implement parts of Directives relating to the encouragement of long-term shareholder engagement. These draft Regulations shall:
- Implement in part Directive 2017/828/EU of the European Parliament and of the Council of 17th May 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement
- Implement the right to vote on a company’s remuneration policy (Article 9a) and the requirement for information to be provided in and right to vote on the remuneration report (Article 9b) of the above Directive
- Provide that the Companies Act 2006 (CA 2006) and associated regulations (which already create a legal framework in the UK for approval of and voting on directors’ remuneration for quoted companies (as defined in CA 2006, s 385) which includes traded companies unless they are unquoted companies) shall now bring unquoted traded companies within scope of the existing legal framework
- Implement a requirement that the remuneration of the chief executive officer and any deputy chief executive officer must be reported even if they are not a director on the board of the company (previously under UK law, only the remuneration of the directors on the board were required to be reported).
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