On 8 April 2014, the Prudential Regulation Authority ("PRA") wrote to firms to provide clarity on the PRA's view of the procedures to be followed when a firm wishes to increase the permitted ratio of fixed to variable ratio above the 1:1 limit. The letter indicates how thresholds should be calculated, how votes should be accounted for and the information necessary firms must provide to shareholders. The PRA also confirms that any staff affected by the higher maximum levels of variable remuneration are not permitted to exercise any voting rights they may have.
The PRA's letter is available at:
http://www.bankofengland.co.uk/pra/Documents/supervision/remuneration/remunerationcap.pdf.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
