The Department for Business, Innovation and Skills (BIS) has launched a consultation on measures to give company shareholders greater influence over executive pay, through enhanced voting rights. It will apply to the remuneration of directors of UK incorporated quoted companies. The proposals include:
- An annual binding vote on future remuneration policy (currently, this vote is only advisory and therefore not binding on the board);
- Increasing the level of support required on votes on future remuneration policy (beyond the current simple majority threshold)
- An annual advisory vote on how pay policy was implemented in the previous year; and
- A binding vote on exit payments of more than one year’s salary.
Subject to the parliamentary process, the Government expects this new legislation to come into force in Spring 2013.
The consultation closes on 27 April 2012. To view a copy, click here: