Overview

This bill mandates employee representation on company remuneration committees and requires an annual, binding shareholder vote on executive pay for public limited companies in the UK. The aim is to increase transparency and accountability in executive compensation.

Description

Employee Representation on Remuneration Committees

Public companies must include at least one employee representative on their remuneration committees. The bill allows companies to decide if this representative has voting rights.

Annual Binding Shareholder Vote on Executive Remuneration

All public limited companies must hold an annual general meeting (AGM) where shareholders vote on the remuneration of executive directors. The outcome of this vote is legally binding on the company.

Other Provisions

The bill specifies the short title as the "Executive Pay and Remuneration Act 2013," sets a two-month commencement period after passage, and confirms its application across England, Wales, Scotland, and Northern Ireland.

Government Spending

The bill does not directly specify any new government spending. The impact on government spending is indirect and would likely involve minimal costs related to bill implementation and enforcement by relevant regulatory bodies. No figures are provided in the bill text.

Groups Affected

• Public Limited Companies: These companies will bear the direct costs of implementing the new requirements, including the costs associated with employee representation on remuneration committees and the process of holding binding shareholder votes.
• Executive Directors: Their pay packages will be subject to greater scrutiny and shareholder control.
• Employees: Gain a voice (potentially with voting power) in determining executive pay through their representative on the remuneration committees.
• Shareholders: Gain a legally binding vote on executive remuneration.
• Regulators: Will be responsible for overseeing compliance with the new law.

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