Corporate reporting – regulations trimming directors' remuneration reports laid in Parliament

The Companies (Directors' Remuneration and Audit) (Amendment) Regulations 2025 (Regulations) have now been made. The Regulations remove some of the directors' remuneration reporting requirements in the Companies Act 2006 and the Large and Medium-Sized Companies and Groups (Accounts and Report) Regulations 2008.

The Regulations come into force on 11 May 2025 and the amendments to the requirements for directors' remuneration reports apply to financial years commencing on or after 11 May 2025, so the trimmed down reporting requirements will apply to companies with a 30 June year end for the financial year commencing on 1 July 2025.  For companies with a 31 December year-end, the changes will apply to financial years commencing on 1 January 2026 and so will be reflected in the directors' remuneration report published in 2027.

The changes remove most of the disclosures which were added to implement parts of the revised EU Shareholder Rights Directive into the UK in 2019. Amendments to the directors' remuneration reporting regime had been expected as part of the drive to streamline non-financial reporting started by the previous government and being continued by the current government (see our blog posts here and here).

The disclosures deleted by the Regulations include:

• the comparison of each director's annual pay change with the average pay change for employees over the same period;
• the total fixed pay and total variable pay for each director from the single total figure table in the remuneration report;
• details of any changes to the exercise price or date of any share options awarded to directors;
• information in relation to the duration of directors' service contracts;
• information in relation to the decision-making process for the determination, review and implementation of the remuneration policy; and
• where the company awards share-based remuneration, information on any vesting periods and any holding periods.

The Regulations also remove the requirement for directors' remuneration reports to be kept available on the company's website for ten years and exclude unquoted traded companies from the directors' remuneration report and policy requirements.

The Regulations also allow remuneration payments or payments to directors for loss of office, which do not comply with the previously approved remuneration policy, to be approved by shareholder resolution and introduce certain amendments in relation to statutory auditors and third country auditors to address issues identified following Brexit.