The draft Companies (Miscellaneous Reporting) Regulations 2018 have been laid before Parliament. They are expected to come into force on 1 January 2019 and to apply in relation to financial years beginning on or after that date.

If the draft regulations are approved by Parliament, from an employment perspective they would require listed companies with more than 250 UK employees to publish on an annual basis, as part of the directors’ remuneration report, pay ratio information comparing
the total remuneration of their chief executive officer (CEO) with the 25th, 50th and 75th percentiles of the full-time equivalent remuneration of their UK employees. The information would need to be published in a pay ratios table which is in the form set
out in the draft regulations, but there are three choices for companies as to how they make the calculations. The affected listed companies would also have to publish additional supporting information, such as an explanation for any increase or decrease in
pay ratios compared to the pay ratios of the preceding financial year and, in the case of the median pay ratio (the 50th percentile), whether, and if so why, the company believes this ratio is consistent with their pay, reward and progression policies for
their UK employees taken as a whole. For a parent company, the number of UK employees within group companies must be included too and pay ratio information would need to relate to the group and not the company. The first pay ratio reports would be published
in 2020 if the draft regulations are approved.

The draft regulations also contain a raft of other corporate governance reform provisions.

Source: New feed