Overview

This bill aims to increase transparency and employee involvement in the decision-making process regarding executive pay in larger companies. It mandates shareholder and employee votes on executive compensation packages, and requires public disclosure of pay ratios between top earners and lower-paid employees.

Description

The Company Remuneration Bill requires companies to obtain shareholder ratification through an ordinary resolution at an annual general meeting for decisions made by their remuneration committees concerning director and top five employee pay. It also mandates a non-binding secret ballot for all employees on these decisions.

Key Aspects:

• Shareholder Ratification: Decisions about executive pay must be approved by shareholders via a vote.
• Employee Ballot: A secret ballot of all employees on executive pay decisions is required (non-binding).
• Transparency Requirements: Annual reports must prominently display the results of the employee ballot and the remuneration ratio between the highest and lowest-paid 10% of employees.
• Definition of "Company": The bill applies to public companies and their subsidiaries in England and Wales.
• Definition of "Remuneration": This encompasses all rewards and benefits, including salary, bonuses, and share options.

Government Spending

The bill is not expected to significantly impact government spending, as it primarily focuses on regulatory changes within the private sector. No specific figures regarding government spending are provided within the Bill itself.

Groups Affected

• Public Companies and Their Subsidiaries (in England and Wales): These companies will be directly affected by the new regulations concerning shareholder and employee votes on executive pay and the increased transparency requirements.
• Shareholders: They will have a greater role in influencing executive compensation decisions.
• Employees: They will have a voice (through a non-binding vote) in decisions related to executive pay and will benefit from greater transparency.
• Remuneration Committees: Their decision-making processes will be subject to increased scrutiny and oversight.

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