This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our privacy statement for more information on the cookies we use and how to delete or block them.

Directors remuneration reporting – more changes ahead

24 May 2019

New EU wide rules on directors remuneration reporting must soon be implemented by all EU member states. The UK has already published draft regulations to implement the rules and unless Brexit occurs before the 10 June 2019 implementation date, these new rules are likely to take effect in the UK. The changes would then apply to remuneration reports for financial years starting on or after 10 June 2019 and remuneration policies approved after that date.


The UK already has considerable legislation on directors’ remuneration reports, so some of the EU requirements are already in place. For example, the report must be published on the company’s website and the EU requirements extend the period for which it must appear to 10 years, remuneration policies must be available on the website while they are in force. The Chair of the remuneration committee must describe any significant changes to directors’ remuneration during the year in his/her report statement. 

The report explaining how the company’s remuneration policy has been implemented will change under the new rules. It will still be necessary to report on the annual change in CEO remuneration, ie total pay, bonuses and benefits but the comparison with employees must now be with the change in average employee pay (calculated excluding directors): and the reports must show the comparable averages over five years – but only starting from 10 June 2019 onwards. When showing director’s pay, the report must show fixed pay (salary/benefits/pensions) separately from variable pay such as long term share incentives and bonuses.

Remuneration policy changes

Implementing the EU rules will extend the current UK requirements for listed companies under the Corporate Governance Code.

Director’s remuneration policies must be voted on and approved at the company’s AGM. Where a new policy is voted down, the existing approved policy can carry on for three years. However, in this situation, the new EU rules will require the company to propose a new policy to be voted on at the next AGM. Where a revised policy is proposed, all significant changes must be fully described and explained.

In addition to the current Code requirements, the EU rules state that a remuneration policy must include information on shares and bonuses vesting for directors as well as any deferral and holding periods. They will also need to include specific detail of the length of each director’s contract.

Read the draft regulations

For help and advice on remuneration reporting please contact Claire Murray.

Employer Essential Index