• Register
Return to: Home > News > UK FRC canvasses opinion on directors’ remuneration

UK FRC canvasses opinion on directors’ remuneration

The UK Financial Reporting Council (FRC) has launched a consultation to assess whether the UK Corporate Governance Code should be amended in relation to certain aspects of executives' payment rules.

The consultation comes after the UK government enacted the Enterprise and Regulatory Reform Act 2013 and the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013.

Both instruments are effective 1 October and deal with issues regarding voting and reporting on executive remuneration.

"The government's new legislation underlines the importance of boards and investors engaging on directors' remuneration. The FRC is undertaking this consultation to understand if there is a case for changes to the Code," FRC chairman Baroness Hogg said.

The FRC's consultation is aimed at gathering stakeholders' opinions on three topics. First, clawback arrangements;

Secondly, ifnon-executive directors who are also executive directors in other companies should be allowed to sit on the remuneration committee;

And thirdly, what actions companies might take if they fail to obtain a majority in support of a resolution on remuneration.

"There is no presumption on the FRC's part as to the outcome. All interested parties will have an opportunity to make their views known before we reach a final decision," Baroness Hogg said.

The Institute of Chartered Accountants in England and Wales head of corporate governance Jo Iwasaki said shareholder rights over remuneration has been on public consciousness, although guidance on robust engagement has only been issued this month.

"Good practice takes time to evolve and guidance needs time to embed. While executive remuneration has been high in the public's awareness, it is not clear that there is appetite for further changes to the existing Corporate Governance Code.

Furthermore, the UK Corporate Governance Code draws its strength, durability and consistency from its principles-based approach and we recognise the issues in the consultation," Iwasaki added.

The FRC said that if changes to the UK Corporate Governance Codeare proposed, they will be subject to consultation in the first quarter of 2014.

Related link

The UK Financial Reporting Council: Directors' Remuneration consultation

Top Content

    Choosing the right location can have cast-iron benefits

    As Game of Thrones, one of the biggest television shows of all time, comes to an end, Joe Pickard looks at how tax incentives offered to television and film production companies help the wider economy.

    read more

    Primary financial statements: a game changer in reporting?

    International Accounting Standards Board chair Hans Hoogervorst delivered a speech at the Seminario International sobre NIIF y NIF, organised by the Consejo Mexicano de Normas de Información Financiera in Mexico. The Accountant presents the highlights.

    read more

    FASB readies standards for the netflix generation

    The US Financial Accounting Standards Board (FASB) has updated its accounting standard for entertainment, with a specific eye on keeping up to date with how episodic content, such as television programmes, is consumed in the modern world. Jonathan Minter reports.

    read more

    Brexit: why it takes two to tango

    Former TA editor Vincent Huck, now editor of Insurance Asset Risk, looks at why Brexit might unleash geopolitical intrigue in Europe’s accounting standard-setting scene – and why IFRS 17 will be an incredible source of opportunity for firms in the coming years.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.