Comparison of UK Corporate Governance remuneration principles
Comparison of UK Corporate Governance remuneration principles

The following Share Incentives guidance note provides comprehensive and up to date legal information covering:

  • Comparison of UK Corporate Governance remuneration principles
  • The influential bodies and guidance
  • Method of adherence to the guidance
  • Composition of the board or remuneration committee
  • Re-election to the board
  • Variable versus fixed pay
  • Performance targets
  • Performance period
  • Level of pay
  • Malus and clawback
  • more

This Practice Note compares the main remuneration principles contained in the:

  1. UK Corporate Governance Code (the Code) published by the Financial Reporting Council (FRC)

  2. the Investment Association (IA) Principles of Remuneration

  3. the PLSA Stewardship Guide and Voting Guidelines published by the Pensions and Lifetime Savings Association (PLSA) (formerly known as the National Association of Pension Funds (NAPF))

  4. the UK Shareowner Voting Guidelines published by the Pensions & Investment Research Consultants Ltd (PIRC)

  5. the Proxy Paper Guidelines for the UK published by Glass Lewis, and

  6. the UK and Ireland Proxy Voting Guidelines published by the Institutional Shareholder Services (ISS)

The influential bodies and guidance

The UK Corporate Governance Code

The FRC is responsible for corporate governance in the UK, and as such has responsibility to publish and maintain a single code of good corporate governance practice. This is now known as the Code (formerly known as the Combined Code).

The latest version of the Code is dated July 2018, and is intended to apply for accounting periods beginning on or after 1 January 2019. The 2018 Code has been substantially recast, shortened and simplified from its previous versions. The provisions relating to remuneration are now more logically presented in a single section of the 2018 Code (section 5), with its own supporting principles.

Adherence to the Code is expected by institutional shareholders (as