Make provision about companies’ remuneration policies.
Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—
Where a company has a remuneration committee, the decisions of that
committee relating to the remuneration of the company’s directors and five
most highly paid employees must, before implementation, be ratified by an
ordinary resolution at an annual general meeting.
Such decisions must also be voted on in a secret ballot of all of that company’s
employees which, for the avoidance of doubt, shall not be legally binding.
Where a ballot has been held under section 1(2), the results of that ballot must
be published prominently in the company’s next annual report.
A company’s annual report must prominently feature details of the
remuneration ratio between the highest remunerated director or employee and
the average remuneration of the lowest remunerated 10% of employees.
(1) In this Act—
“a company” means—
a public company within the meaning of section 4(2) of the
Companies Act 2006 (private and public companies), or
any subsidiary of a public company within the meaning of
section 1159 of the Companies Act 2006 (meaning of
“subsidiary” and related expressions);
“an employee” means a person employed by the company and
discharging duties for the company wholly or partly in the UK;
Company Remuneration BillPage 2
“remuneration” means all rewards and benefits including, in particular,
share options, bonuses, beneficial rights and salary;
“a remuneration committee” means a committee or comparable body
appointed by a company, in particular, to—
determine broad policy for the remuneration of directors, the
chairman or the chief executive office of a company;
set individual remuneration levels for directors, the chairman
or the chief executive office of a company;
monitor or review remuneration policies for senior and middle
propose changes to general remuneration policies.
(1) This Act applies to England and Wales only.
(2) This Act shall come into force on the day on which it is passed.
(3) This Act may be cited as the Company Remuneration Act 2011.