In a welcome piece of deregulation, the UK Financial Conduct Authority has confirmed changes to the Listing Rules which remove most of the disclosure requirements relating to directors’ remuneration. For most remuneration-related disclosures, UK incorporated premium listed companies should now only need to comply with the 2013 Directors’ Remuneration Reporting Regulations.
The FCA has recognised that most of the former disclosure requirements in the Listing Rules were very similar to those imposed by the Regulations. So they have deleted them, leaving what was Listing Rule 9.8.8R(9) (in respect of details of a director’s service contract) as the sole aspect of LR9.8 that now applies to UK incorporated listed companies. In addition, that wording has been tweaked and will simply require a UK incorporated company to disclose:
details of the unexpired terms of any director’s service contract of a director proposed for election or re-election at the forthcoming AGM and, if any director proposed for election or re-election does not have a directors’ service contract, a statement to that effect.
The start date for the changes to the Rules has been aligned to the Regulations – both apply to UK incorporated companies with a financial year ending on or after 30 September 2013 (unless the company had already published its annual report by 13 December in which case the changes to the Rules can be ignored without consequence). This is the biggest change since the launch of the FCA’s consultation in August and, again, helps smooth the introduction of the new regime on DRR. Companies that are already preparing their annual report to comply with both the existing Listing Rules and the Regulations can still choose to do so, although it’s unlikely any company will actively seek to overcomplicate its reports with overlapping disclosures.
Non-UK listed companies are now left in an odd position. They are not required to comply with the Regulations and remain subject to the “old” Listing Rules disclosure requirements. But their shareholders will probably expect them to comply with the Regulations. So, here’s the question: how do you balance shareholder expectations against the legal and regulatory requirements, without overloading reports with duplicate disclosures? Something for Remuneration Committees of non-UK listed companies to chew over during the festive break.