The competition framework Summary and Background Section 79: Members’ approval of directors’ remuneration policy
541.Subsection (1) inserts a new subsection (2A) into section 421 (Content of directors’ remuneration report) of the CA 2006 and requires that, in making regulations on the required content of a directors’ remuneration report, the Secretary of State must specify that the company’s policy on remuneration of directors must be in a separate part of the report.
542.Subsection (2) inserts a new section 422A which makes it possible for a company to revise the directors’ remuneration policy part of the directors’ remuneration report. Section 422A(5) applies certain provisions in the CA 2006 to the revised report, as they apply to a directors’ remuneration report.
543.Subsection (4) inserts a new section 439A of the CA 2006 alongside the existing requirement under section 439 (Quoted companies: members’ approval of directors’ remuneration report) to put the directors’ remuneration report to a shareholder resolution at every accounts meeting. This new section provides for a separate shareholder resolution on the directors’ remuneration policy part of the directors’ remuneration report.
544.Section 439A(1) requires companies to put the directors’ remuneration policy to a shareholder resolution at an accounts or other general meeting in the first financial year commencing on or after the day on which the company becomes a quoted company, and at least every three financial years thereafter.
545.Section 439A(2) has the effect of requiring companies to put the directors’ remuneration policy to a shareholder resolution at the accounts meeting if, at the last accounts meeting, the shareholder resolution on the directors’ remuneration report put forward under section 439 of the CA 2006 was not passed; and if, at that last accounts meeting or other general meeting held since, there was no shareholder resolution on the directors’ remuneration policy under section 439A.
546.Section 439A(5) applies subsections (2) to (4) of existing section 439 of the CA 2006 to section 439A, therefore requiring: notice to be given in any manner permitted for the service on the member of notice of the meeting; for the business of the meeting to include the resolution; and for the existing directors to ensure the resolution is put to the vote of the meeting.