The ICSA have warned that ‘this is a step too far’, and could force many of the UK’s leading companies to relocate outside of the UK.
Caroline Phillips, director of the ICSA’s policy unit, said: ‘There have also been rumblings by companies considering a move overseas to jurisdiction with less demanding disclosure requirements. These proposals may be the last straw.’
ICSA also said legislation in this area would be ineffective and counterproductive and could enable disreputable firms to hide behind the law by claiming compliance with the disclosure requirements.
Phillips said: ‘Combining the reporting of history with the forward-looking remuneration policy is fundamentally wrong. Payments to director are normally made under an existing contract and cannot realistically be changed in arrears.’
An alternative proposal, according to ICSA, would be for the current requirements to disclose details of past remuneration to remain. These disclosures should then be accompanied by a statement confirming their compliance with a company’s remuneration policy approved by shareholders. Any changes to directors’ remuneration should then be put to a shareholder vote, said ICSA.
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