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The draft Companies (Directors' Remuneration and Audit) (Amendment) (Regulations) 2025 (Regulations) have been published and propose several amendments to the directors' remuneration reporting requirements in the Companies Act 2006 and the Large and Medium-Sized Companies and Groups (Accounts and Report) Regulations 2008.
The explanatory notes to the Regulations explain that the proposed changes remove most of the disclosure requirements regarding directors' remuneration which were added in 2019 to implement parts of the revised EU Shareholder Rights Directive into the UK. These amendments to the directors' remuneration reporting regime have been expected as part of the government's drive to streamline non-financial reporting as initiated by the previous government (see our blog posts here and here).
The remuneration report and policy disclosures being deleted by the Regulations include:
- the comparison of each director's annual pay change with the average pay change for employees over the same period;
- the total fixed pay and total variable pay for each director from the single total figure table;
- details of any changes to the exercise price or date of any share options awarded to directors;
- details of any deferral periods related to the award of directors’ performance pay;
- information in relation to the duration of directors' service contracts;
- information in relation to the decision-making process for the determination, review and implementation of the remuneration report; and
- where the company awards share-based remuneration, information on any vesting periods and any holding periods.
The Regulations also propose to remove the requirement for directors' remuneration reports to be kept available on the company's website for ten years and to exclude unquoted traded companies from the requirement to produce a directors' remuneration report and policy.
The proposals in the Regulations also allow payments to directors for loss of office, which do not comply with the previously approved remuneration policy, to be approved by shareholder resolution.
Although the timing for these proposals is unclear, these changes will be welcomed by UK quoted and unquoted traded companies as providing a simplified and streamlined directors’ remuneration reporting framework.
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