Overview

This bill mandates employee representation on company remuneration committees and requires annual binding shareholder votes on executive pay for public limited companies in the UK. It aims to increase transparency and employee voice in executive compensation decisions.

Description

Employee Representation on Remuneration Committees: The bill necessitates at least one employee representative on the remuneration committee of every public company. The bill allows companies to decide whether these representatives will have voting rights on the committee.

Annual Binding Shareholder Vote on Executive Remuneration: Each public limited company must hold an annual general meeting where shareholders vote on executive pay packages. The outcome of this vote is legally binding on the company. "Executive" is defined as any executive director.

Act Details: The bill's official title is the Executive Pay and Remuneration Act 2013. It would come into effect two months after passage and applies across England, Wales, Scotland, and Northern Ireland.

Government Spending

The bill doesn't directly specify government spending. Implementation may require minor administrative costs for regulatory bodies overseeing compliance, but no figures are provided in the bill text.

Groups Affected

• Public Limited Companies: Required to implement both employee representation and binding shareholder votes on executive pay, potentially impacting their governance structures and executive compensation strategies.
• Shareholders: Granted a legally binding vote on executive remuneration, giving them more control over executive pay.
• Employees: Gain representation on remuneration committees, potentially influencing executive pay decisions.
• Executive Directors: Their compensation will be subject to greater scrutiny and shareholder control.
• Regulatory Bodies: May incur costs associated with overseeing compliance with the new legislation.

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