Proposals for shareholder regulation of boardroom pay are advancing, with the Department for Business, Innovation and Skills having published a new consultation paper containing what look to be the final proposals on the matter.
The full proposals apply to all UK quoted companies – privately owned companies will be unaffected.
The main components of the new regulations will be:
- an annual binding vote on future remuneration policy;
- an increase in the level of support required to pass a vote approving future remuneration policy;
- an annual advisory vote on how remuneration policy has been implemented in the previous year; and
- a binding vote on exit payments of more than one year’s base salary.
The new proposals are likely to take effect for accounting periods ending after 1 October 2013.