Guidance Note on changes to Directors’ Remuneration Reporting

On 23 April 2025, the Department for Business and Trade published Guidance on The Companies (Directors’ Remuneration and Audit) (Amendment) Regulations 2025 (Regulations) which are due to come into force on 11 May 2025.

As a reminder, the Regulations will remove over-lapping requirements in the directors’ remuneration reporting framework for UK quoted companies. The purpose of the Guidance is to confirm when some of the changes will apply and clarify some of the provisions on future reporting comparing board and employee pay.

Directors’ Remuneration Report

The changes to the directors’ remuneration report (except for those made to the directors’ remuneration policy) will apply to the first remuneration report that a company publishes for a financial year beginning on or after 11 May 2025.

Directors’ Remuneration Policy

The changes to the directors’ remuneration policy will apply to any new policies approved by shareholders on or after 11 May 2025.

If a company has prepared a directors’ remuneration policy which is in line with the pre-May 2025 directors’ remuneration policy requirements but which is not due to be approved by shareholders until after 11 May 2025, the Guidance recommends amending the draft Policy to align with the Regulations before asking shareholders to approve it.

Payments to Directors outside the Directors’ Remuneration Policy

From 11 May 2025, any payments to directors outside an existing remuneration policy must just be referred to shareholders to approve the specific payment. There will be no need for the policy to be revised and approved as consistent with the payment as is currently the case.

Reporting pay of a Deputy CEO who is not a Director of the Company

After 11 May 2025, a Deputy CEO who is not a director will no longer need to be paid in accordance with an approved Directors’ Remuneration Policy however the Directors’ Remuneration Report for the financial year beginning before 11 May 2025 must disclose the pay of such Deputy CEO for the whole of that financial year.

Reporting pay comparisons

The Guidance confirms that the Regulations remove the requirement to report a comparison of the annual percentage change in each director’s pay against the average percentage change in employee pay however other provisions remain in force requiring similar, albeit more detailed, disclosures about CEO pay and wider employee pay (paragraphs 19A-G of Schedule 8 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008).

Publication of information on website

From 11 May 2025, there will no longer be a requirement for the directors’ remuneration report to be available on a company’s website for ten years or for certain information about the shareholder vote on the directors’ remuneration policy to published on the website. These amendments address inconsistencies with the publication requirements for the other parts of the annual report and accounts and remove duplicative requirements.

If you would like to discuss any of the points raise above or would like any further information on corporate reporting requirements, please speak to your usual contact at Burges Salmon, Nick Graves, Head of the Corporate Department, or Charlotte Hamilton.