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On 7 September 2026, the Government published its "Modernising Corporate Reporting" consultation document, setting out its proposed approach to modernising and streamlining corporate reporting requirements with the aim of promoting economic growth and strengthening the UK's international competitiveness.
The proposals represent a major overhaul of the UK's corporate reporting framework and the comments below focus on the key proposals relating to remuneration reporting.
The consultation is available [here].
Removal of the annual shareholder vote on the remuneration report
Surprisingly, the Government is considering removing the requirement for an annual advisory vote on directors’ pay, leaving the binding three year remuneration policy vote as the sole remuneration-related shareholder vote (on the basis that the advisory vote adds little value once the policy has been approved).
What remuneration reporting requirements does the Government propose to retain and/or simplify?
The Government proposes to retain key investor-critical information within the current remuneration reporting regulations:
- the annual disclosure of total single remuneration figure for each director (with views invited on how the methodologies for calculating this figure could be refined e.g. the introduction of a de minimis threshold);
- the statement from the Chair of the Remuneration Committee summarising key decisions or proposals on directors' pay and any use of discretion;
- disclosure of performance measures attached to pay awards in the previous year;
- the forward-looking directors' remuneration policy including maximum variable pay outcomes for executive directors based on performance criteria and their link to company strategy; and
- the ten-year CEO pay and total shareholder return performance graph.
What remuneration reporting requirements does the Government propose to remove?
The Government proposes removing reporting requirements that:
- do not provide financially material or decision-useful information for investors and creditors; or
- can provide decision-useful information in some circumstances, but related provisions in the UK Corporate Governance Code’s ‘comply or explain’ framework are sufficient e.g. malus and clawback policies, and any use of malus and clawback in the previous year.
Comment
The Government's stated aim of streamlining reporting is welcome. The proposed removal of the annual advisory vote on remuneration is a surprise. Feasibly this could result in shareholder/institutional advisory expectations on policies becoming more rigid, given that there would no longer be any ability to moderate remuneration practices on an annual basis. We may also see shareholders resort to other outlets to express frustration with executive pay, for example the AGM vote to re-appoint the chair of the remuneration committee.
Next steps
Given the broad implications of these proposals for companies of all sizes and categories, the Government is encouraging a wide range of businesses and business leaders to submit their views during the 12-week consultation period.
The consultation will close on 30 November 2026 and responses can be submitted via the Government's online survey or by email.
The Government aims to publish its consultation response within six months of the closing date, although no commencement date for any resulting legislative changes has been specified.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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