United Kingdom: Executive Remuneration

The FCA is proposing to replace three separate remuneration codes with a single, more flexible framework for UK solo-regulated firms. While the new regime would reduce prescriptive requirements around deferral, malus and clawback, it maintains a strong emphasis on governance and evidence-based decision-making. Firms can begin preparing now by reviewing their scope, pay structures and documentation practices ahead of the September consultation deadline.

The UK's new government faces a delicate challenge: raising revenue from higher earners while maintaining London's status as a global financial hub. Recent Supreme Court victories by HMRC against major hedge funds signal an increasingly aggressive stance on executive remuneration that could pose fresh obstacles for private capital firms already grappling with carried interest reforms and non-dom rule changes.

The UK Financial Conduct Authority has published proposals for reforming the remuneration framework for UK solo-regulated firms, introducing greater flexibility and proportionality to how staff compensation is regulated in UK asset managers. The consultation, open until September 2026, presents coherent and proportionate reforms that could significantly impact remuneration regulation if adopted in final rules expected in Q1 2027.

European listings have made a remarkable comeback in 2024, indicating that more companies view the current market condition as an optimal listing window.

The 2025 ISS voting guidelines introduce updates on executive compensation and board diversity, emphasizing tailored remuneration strategies, enhanced transparency, and alignment with shareholder interests while clarifying FCA reporting expectations on diversity targets.

The UK Government proposed legislative changes to streamline environmental compliance for housing developments, introducing Delivery Plans and a Nature Restoration Fund. These plans centralize environmental assessments, fund interventions, and simplify nutrient pollution considerations for developers.

The Pensions and Lifetime Savings Association (PLSA) has published its Stewardship & Voting Guidelines 2023. The guidelines set out the PLSA's views on key issues and its voting recommendations on those issues.

Setting performance targets, for both short and longterm incentives, is one of the key activities in the remuneration committee's annual cycle.

HMRC has announced in Employment Related Securities Bulletin 47 that it will be introducing some changes to Employment Related Securities (ERS) annual filings templates from 6 April 2023.