In case you missed it – the reporting requirements for PLC directors’ remuneration have changed

Earlier this year the Government published the draft Companies (Directors' Remuneration and Audit) (Amendment) Regulations 2025 (the Regulations). These Regulations streamline the reporting requirements on directors’ remuneration for quoted companies.

Background

In 2019 several provisions introduced into the UK’s legal framework under EU Directive EU 2017/828 resulted in a number of overlapping requirements for directors’ remuneration reports.  The new Regulations seek to eliminate those and simplify the directors’ remuneration reporting framework.

Key changes

1. Removal of specific disclosure requirements: The Regulations remove several disclosure requirements from the directors’ remuneration report, including:
   • The comparison of the annual change in each director’s salary, benefits, and bonus to that of the company’s employees over a five-year period; 
   • The requirement to include a sub-total for fixed and variable remuneration awarded to each director in the single figure table;
   • Details of any changes to the exercise price or date of share options awarded to directors; 
   • Information regarding the length of directors’ service contracts;
   • Information about the process for determining, reviewing, and implementing the remuneration report; and
   • The requirement to disclose remuneration details for anyone holding the position of Deputy CEO (whether or not they are a director).
2. CEO pay ratio remains: The requirement to produce a CEO pay ratio has been retained without modification.
3. Timing: The remuneration report changes generally apply in relation to reports for financial years beginning on or after 11 May 2025. This means that for companies with a September or December year end, their 2025 DRR will still need to include these items. The first reports to be published without these details will start to come out over summer 2026.  
4. Payments outside policy: When the binding directors’ remuneration policy was first introduced, companies were able to seek one-off shareholder approval for payments that were not consistent with the policy. The changes made in 2019 removed that ability and instead required companies to seek approval for an entire amended policy. The new Regulations reverse that change and so it is now possible to seek approval for one-off payments without needing to put an entire new policy to shareholders. It is still relatively rare for a company to seek approval outside the AGM but for any company wanting to do that, these changes come into effect immediately.

What’s the impact of this?

While the removal of certain disclosure requirements is to be welcomed, the regulations still require granular disclosure on most aspects of directors’ pay and there has been no change to the expectations of investors and proxy agencies, so we will not see a material shortening of directors’ remuneration reports.

If you would like to discuss any of the issues discussed in this blog post, please get in touch with your usual Freshfields contact or any of the authors.