UK - Moves to make directors pay and pension provision more transparent to shareholders look likely to be made law.
The Department of Trade & Industry says industry feedback to its consultation on letting shareholders vote on the directors’ remuneration report has been positive.
A DTI spokeswoman said: “The proposal in the consultation document on directors' pay is designed to improve disclosure in this area and to give shareholders more clarity.
“Shareholders will now be able to see the full value of directors' pensions rather than just the increases over the year.”
The NAPF has already given its support to the move, but it hopes that rather than using legislation, the government will incorporate the changes into the Combined Code.
Director of investment David Gould said: “As simplification is all important, it seems unnecessary to involve legislation as it is often slow, cumbersome and difficult to amend.
“So that companies and shareholders can benefit from these proposals as soon as possible, we hope that the government will look at amending the code to provide a quick, effective and flexible solution.”
Under the proposals, the directors’ remuneration report would include details of the company’s performance criteria for long-term incentive schemes and graphs comparing how the company has performed against competitors over five years.
Companies would also be required to improve disclosure on directors’ contracts and compensation payments.
By Paul Sanderson
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