FRC publishes consultation on directors’ remuneration

FRC publishes consultation on directors’ remuneration


The Financial Reporting Council (FRC), the UK’s independent regulator responsible for promoting high quality corporate governance and reporting, is currently consulting on whether the UK Corporate Governance Code (Code) should be amended in light of new legal requirements relating to directors’ remuneration.

The requirements are part of the Government’s range of reforms set out in the Enterprise and Regulatory Reform Act 2013. More information can be found in our recent blog by clicking here.

Specifically, the FRC is seeking to ascertain the views of investors and companies on the following three issues:

  1. the use of clawback arrangements in directors’ contracts;
  2. whether non-executive directors who are also executive directors in other companies should sit on the remuneration committee; and
  3. actions companies might take if they fail to obtain a substantial majority in support of a resolution on remuneration.

Responses to the consultation are required by 6 December 2013.

Any prosed changes to the Code will be subject to consultation in the first quarter of 2014. The new Code would then apply to accounting periods beginning on or after 1 October 2014.