The UKLA has now said it does not plan to make any immediate changes to the Listing Rules requirements on directors' remuneration reports to reflect the new Directors' Remuneration Report Regulations. Listed companies will therefore have to contend with two overlapping regimes for the disclosure of directors' remuneration.
The Institute of Chartered Secretaries and Administrators (ICSA) has produced a guidance note for listed companies, and the Auditing Practices Board (APB) has issued a Bulletin on the new requirements for auditors.
The Directors' Remuneration Report Regulations 2002, which came into force on 1 August 2002, introduced a new statutory disclosure and shareholder approval regime for directors' remuneration. They require UK quoted companies to produce a directors' remuneration report for each relevant financial year and to put a resolution on that report to shareholders at each annual general meeting. ("Quoted companies" are those whose shares are listed on the Official List of the UKLA; or listed on another principal European stock exchange; or admitted to dealing on the New York Stock Exchange or Nasdaq.) The Regulations amended Part VII (Accounts and Audit) of the Companies Act 1985 and added a new Schedule 7A to that Act, which sets out the detailed requirements for the form and content ofthe directors' remuneration report. The new requirements apply with regard to financial years ending on or after 31 December 2002, which means that they will apply to most UK quoted companies' next report and accounts.
For companies who send shareholders a summary financial statement instead of a full copy of the directors' report and accounts, the Companies (Summary Financial Statement) Amendment Regulations 2002 provide that this mustnow include a summary of information from the new form of directors'
remuneration report, and the new performance graph required by the Regulations, as well as the existing summary information from the report and accounts.
We issued a briefing on the new Regulations, and the steps which we suggest companies should take to prepare themselves for the new regime, in August 2002. For further copies, see the contact details at the end of this bulletin.
This update covers three new developments - the position under the Listing Rules and the ISCA and APB guidance on the Regulations.
The Listing Rules
The Listing Rules, and the Combined Code on Corporate Governance which is appended to the Listing...