The Companies (Miscellaneous Reporting) Regulations 2018 came into force on 1 January 2019 and they apply in relation to the financial years of companies beginning on or after that date.

The regulations require UK listed companies with over 250 UK employees to report annually on their Chief Executive Officer (CEO)/average employee pay ratio. Specifically, the regulations require affected companies to disclose and explain the ratio of their
CEO’s total remuneration over a financial year to the 25th (lower), 50th (median) and 75th (upper) percentiles of the full-time equivalent remuneration of their UK employees for the same financial year. The first pay ratio reports are due to be published from
the start of 2020, covering CEO and employee pay awarded in 2019.

Alongside the pay ratio reporting requirement is a new statutory duty on companies to set out the impact of share price growth on executive pay outcomes. This is aimed at providing greater clarity about the impact that significant share price growth can
have on executive pay outcomes.

The regulations also contain a raft of other corporate governance reform provisions, including a requirement for all large companies to report annually on how their directors take employee and other stakeholder interests into account.

Source: New feed