21 June 2012
Following yesterday’s announcement by the Government on how it will legislate to give shareholders of quoted companies greater control over directors’ pay – which we covered in this post - the Financial Reporting Council has today published a report on “A single figure for directors’ remuneration”. Accompanying press release here.
The aim of the report, which comes out of work done by the FRC’s Financial Reporting Lab, is to suggest a methodology by which quoted companies can publish a single figure for the pay of each of their directors. The report will support the Government’s intention, in its proposed pay reforms, to require quoted companies to publish that single figure in the pay “implementation report” that a company will need to publish in its annual report.
The FRC’s report runs to 15 pages and contains multiple tables, suggest disclosure approaches and appendices – suggesting that the production of a single figure that is meaningful (and comparable across other companies) is, as might be expected, not going to be straightforward. Cold towels all round.
See also: FRC to consult on directors’ pay in support of the Government’s reform plans
21 June 2012
Following yesterday’s announcement by the Government on how it will legislate to give shareholders of quoted companies greater control over directors’ pay - which we covered in this post - the Financial Reporting Council has announced that it will consult on remuneration-related changes to the UK Corporate Governance Code once the Government’s legislation is in place:
“The FRC will consult on two proposals that the Government has asked it to consider: to extend the Code’s existing provisions on claw-back arrangements, and to limit the practice of executive directors sitting on the remuneration committees of other companies. It will also seek views on whether companies should engage with shareholders and report to the market in the event that they fail to obtain at least a substantial majority in support of a resolution on remuneration.”
See also: A single figure for directors’ pay? FRC Financial Reporting Lab report
Changes to the UK Corporate Governance Code, Stewardship Code and Auditing Standards: FRC starts consultation
21 June 2012
The Government yesterday published its finalised plans for giving shareholders in quoted companies* control over directors’ remuneration. The Department of Business, Innovation and Skills press release is here and its “Statement of government policy” is here.
BIS describes its proposed reforms as “the most comprehensive reforms of the framework for directors’ remuneration in a decade”. The reforms will be effected through the Enterprise and Regulatory Reform Bill. What BIS describes as “simplified” regulations setting out how companies must report directors’ pay will be published and consulted on. The government’s plan is that all these reforms will be enacted by October 2013.
Pay reforms: Government intentions
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21 June 2012
The Insolvency Service yesterday withdrew its action against former directors of Farepak Food & Gifts Limited (Farepak) and its parent company European Home Retail Group PLC.
The application for disqualification orders against the directors was in progress at the High Court. It was withdrawn following the judge’s questioning of whether the action should continue in the light of, amongst other matters, the reported actions of HBOS in refusing to place Farepak customers’ money into a separate trust account prior to Farepak’s collapse. If HBOS did refuse to do that, it would have meant that more cash was available to meet creditors’ claims. HBOS was a major creditor.
The Daily Telegraph’s report of the ending of the disqualification action is here and the Mail’s is here.
UPDATE 6 July 2012: Lloyds Banking Group to make £8 million ex-gratia payment to former Farepak customers
See also: Farepak: what the judge said
Business Secretary Vince Cable has referred HBOS, now part of Lloyds Banking Group, to the FSA after his prosecution of the Farepak directors collapsed last week. In a statement Mr Cable also said he would also be contacting HBOS to establish how they would respond to calls for the bank to pay more into the Farepak creditors’ compensation fund – Daily Telegraph
Disqualification action against former Farepak directors to start on 24 May
Farepak liquidation: Advisers’ fees exceed total creditor payout
Insolvency Service applies for disqualification order against former President of the CBI