Corporate reporting – draft regulations trimming directors' remuneration reports published

The draft Companies (Directors' Remuneration and Audit) (Amendment) Regulations 2025 (Regulations) have been published, which set out proposed amendments to 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 explanatory notes to the Regulations explain that the changes are being made to 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 being 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 propose to remove the requirement for directors' remuneration reports to be kept available on the company's website for ten years and to exclude unquoted traded companies from the directors' remuneration report and policy requirements. 

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