| answer text |
<p>The existing legal framework provides full transparency about directors’ remuneration
arrangements, including on salaries and bonuses, and gives shareholders a strong say
on pay.</p><p> </p><p>Since 2013, the law has required quoted companies to prepare
a directors’ remuneration policy. This must set out how the company proposes to pay
directors, including every element of remuneration that a director is entitled to
and how it supports the company’s long-term strategy and performance. Companies are
required to put the remuneration policy to a binding shareholder vote at least once
every three years.</p><p> </p><p>Companies must also publish an annual remuneration
report showing how the approved pay policy has been implemented, including a single
figure for the total pay directors received that year. This report is subject to an
annual advisory vote. If the company loses this vote, it is required to put a new
remuneration policy to shareholders the following year.</p><p> </p><p>Alongside the
legislative requirements, the UK Corporate Governance Code includes principles and
provisions setting out how companies should approach executive remuneration, including
a principle that executive remuneration should be “aligned to company purpose and
values and be clearly linked to the successful delivery of the company’s long-term
strategy”. The Financial Conduct Authority’s Listing Rules require companies to make
a report in their corporate governance statement to enable shareholders to evaluate
how the principles have been applied.</p>
|
|
