'Director know how' is a monthly article which highlights key rule changes, proposed changes and market updates so that you know what is coming down the track.
New proposals to enhance shareholder voting rights on executive pay
The Department for Business, Innovation and Skills (BIS) has issued a consultation outlining their detailed proposals to give shareholders more influence on executive pay in companies through enhancing their voting rights. BIS has proposed:
- an annual binding vote on future remuneration policy
- requiring a super-majority vote to approve future remuneration policy
- an annual advisory vote on the implementation of remuneration policy in the previous year, and
- a binding vote on exit payments of more than one year's salary.
These proposals will apply to UK listed companies. We are currently in the process of responding to the consultation. Let us know what you think by emailing Maria Gomes.
The European Union consults on quotas for women on boards
Unhappy with the take up of their voluntary initiative to increase the number of women on EU company boards, the European Commission has issued a consultation seeking feedback on whether it should legislative a quota for women on boards, what the quota could be, whether it should be binding or voluntary, and what penalties could be enforced if the quota is not reached. This could be the first step towards legislation in this area.
The Office of Tax Simplification proposes to simplify approved share schemes
On 6th March 2012, the Office of Tax Simplification (OTS) published the final report of its review of the four tax-advantaged employee share plans – approved Share Incentive Plans (SIP), approved Savings-Related Share Option Plans (SAYE), approved Company Share Option Plans (CSOP) and Enterprise Management Incentives (EMI).
In this report, the OTS has called into question the future of the Company Share Option Plans (CSOP), recommending that further work should be carried out to investigate whether the CSOP is still relevant for UK business. We urge all companies with CSOPs to write to the OTS (at email@example.com) to explain what they use them for and why they are a valuable tool for motivating and retaining their employees.
The Quoted Companies Alliance Share Schemes Committee is examining the proposals and will be providing feedback to the OTS on them. For more information, click here for a full analysis of the OTS's report of it.