On June 11, the UK Government released a draft statutory instrument (The Companies (Miscellaneous Reporting) Regulations 2018) and accompanying FAQs, which, subject only to Parliamentary approval, will require additional disclosures to be made in the Annual Reports of Listed PLCs* for financial years beginning on or after January 1, 2019. These changes will be implemented via amendments to the Large & Medium-sized Companies and Groups (Accounts & Reports) Regulations 2008.
These new reporting requirements are part of the Government’s wider package of corporate governance reforms announced in August 2017 (for further information on the wider package of reforms, click here, for further information on the UK Corporate Governance Code developments, click here, and for further information on the reforms affecting large private companies and unlisted PLCs, click here).
Summary of the Additional Disclosures Required in the Annual Report
Subject to meeting the relevant thresholds described below, Listed PLCs* will be required to make additional disclosures regarding, among other things:
- The ratio of the CEO’s pay (the single total figure of remuneration) to the median (50th), 25th and 75th percentile full-time equivalent remuneration of their UK employees;
- The impact of the future share price on executive pay; and
- How the directors have engaged with employees.
* A Listed PLC, otherwise referred to as a “quoted company”, is a UK incorporated PLC with equity shares listed on the FCA’s Official List, or on NASDAQ, the NYSE, or a recognised stock exchange in the EEA. It does not include AIM listed companies.