Administration July 10, 2002
UK Govt Proposes Directors' Comp Transparency Laws
October 19, 2001(PLANSPONSOR.com) - In a bid to
strengthen the link between compensation and performance at
UK companies, shareholders are to be given the right to vote
on directors' pay.
Reported by editors@plansponsor.com
UK Trade and Industry Secretary Patricia Hewitt announced that new legislation will be introduced, which will require listed companies to:
- publish a report on directors’ remuneration as part of the company’s annual reporting cycle,
- disclose within the report details of individual directors’ remuneration packages, the role of the board’s remuneration committee, and the board’s remuneration policy as well as specific requirements relating to the disclosure of information on performance, and
- include an annual resolution to
shareholders on the remuneration report
The legislation aims to prevent directors from being lavishly rewarded for lackluster performance, to the detriment of their companies and shareholders.
The Government will introduce secondary legislation to implement these new requirements in the coming Parliamentary session.
– Camilla Klein editors@plansponsor.com