Overview

This bill mandates employee representation on company remuneration committees and requires a binding annual shareholder vote on executive pay for public companies. A 75% shareholder vote is needed for approval.

Description

This bill introduces two key changes to executive remuneration in public limited companies:

Employee Representation on Remuneration Committees

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

Annual Binding Shareholder Vote

Public limited companies must hold an annual binding shareholder vote on executive pay. The motion regarding executive remuneration will only pass if at least 75% of voting shareholders approve it.

The bill defines "executive" as any executive director of the company. The act will come into force two months after it is passed and applies across the UK.

Government Spending

The bill doesn't directly specify government spending. The implementation might involve some administrative costs for regulatory bodies, but no figures are provided in the bill text.

Groups Affected

Public Limited Companies: These companies will be directly affected by the new requirements for employee representation and binding shareholder votes on executive pay. This may increase costs and administrative burdens.

Shareholders: Shareholders gain a more direct say in determining executive pay, influencing corporate governance and potentially affecting the company's financial performance.

Employees: Employees gain a voice in the decisions regarding executive pay through their representation on remuneration committees.

Executives: Executives' remuneration will be subject to greater scrutiny and shareholder control.

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