Companies Act 2014

F757[Right to vote on remuneration policy

1110M

1110M. (1) A traded PLC shall

(a) prepare a policy regarding the remuneration of its directors in accordance with subsection (6) (in this section referred to as a "remuneration policy"), and

(b) cause a vote on the remuneration policy (in this section referred to as a "remuneration vote") to be held at a general meeting of the traded PLC.

(2) Subject to any provision of the traded PLCs constitution making a remuneration vote binding on the traded PLC (in this section referred to as a "binding vote"), a remuneration vote shall be advisory (in this section referred to as an "advisory vote").

(3) (a) Subject to subsection (8), where a remuneration policy is approved by a binding vote, the traded PLC shall pay remuneration to its directors in accordance with the remuneration policy to which that vote related.

(b) Where a binding vote is held on a remuneration policy, and the remuneration policy is not approved by that vote, the traded PLC shall

(i) prepare a revised remuneration policy and cause a remuneration vote to be held in respect of the revised remuneration policy at the following general meeting, and

(ii) subject to subsection (8), until such time as the remuneration vote referred to in subparagraph (i) is held

(I) where the traded PLC has previously approved a remuneration policy by a binding vote, pay its directors in accordance with that remuneration policy, or

(II) where the traded PLC has not previously approved a remuneration policy by a binding vote, pay its directors in accordance with its existing practices.

(4) (a) Subject to subsection (8), following an advisory vote, and regardless of the outcome of the vote, a traded PLC shall pay its directors in accordance with

(i) the remuneration policy to which that vote related, or

(ii) a remuneration policy that has previously been approved by a remuneration vote.

(b) Where an advisory vote is held on a remuneration policy, and the remuneration policy is not approved by that vote, the traded PLC shall prepare a revised remuneration policy and hold a remuneration vote in respect of that revised policy at the following general meeting.

(5) (a) Subject to paragraph (b) of subsection (4), and paragraphs (b) and (c), a traded PLC shall hold a remuneration vote at least once every 4 years.

(b) Where, on or before the date on which the European Union (Shareholders Rights) Regulations 2020 come into operation, a traded PLC has

(i) prepared a policy regarding the remuneration of its directors, regardless of whether or not that policy complies with the requirements of subsection (6), and

(ii) approved the policy referred to in paragraph (i) in general meeting of the traded PLC, the traded PLC shall not be required to hold a remuneration vote until a period of 4 years has elapsed from the date on which the approval mentioned in subparagraph (ii) was given.

(c) Notwithstanding any provision of this subsection, a traded PLC shall cause a remuneration vote to be held in respect of every material change to the traded PLCs remuneration policy, or to a policy referred to in paragraph (b).

(6) The remuneration policy shall

(a) explain how it contributes to the traded PLCs business strategy and long-term interests and sustainability,

(b) be clear and understandable,

(c) describe the different components of fixed and variable remuneration, including all bonuses and other benefits in whatever form, which can be awarded to directors, and indicate their relative proportion,

(d) explain how, if at all, the pay and employment conditions of employees of the traded PLC were taken into account when establishing the remuneration policy,

(e) set clear, comprehensive and varied criteria for the award of variable remuneration awarded by the traded PLC, if any,

(f) specify information on any deferral periods and on the possibility for the traded PLC to reclaim the variable remuneration referred to in paragraph (e),

(g) indicate financial and non-financial performance criteria, including, where appropriate, criteria relating to corporate social responsibility, and explain how they contribute to the traded PLCs business strategy and long-term interests and sustainability,

(h) indicate the methods applied, or to be applied, to determine the extent to which the performance criteria referred to in paragraph (g) have been fulfilled,

(i) where the traded PLC awards remuneration in the form of, or based on, shares, specify vesting periods and, where applicable, retention of shares after vesting and explain how the share-based remuneration contributes to the traded PLCs business strategy and long-term interests and sustainability,

(j) indicate the duration of the contracts or arrangements with directors and the applicable notice periods, the main characteristics of supplementary pension or early retirement schemes and the terms of the termination and payments linked to termination,

(k) explain the decision-making process followed for its determination, review and implementation, including measures to avoid or manage conflicts of interest and, where applicable, the role of a remuneration committee or other committees concerned,

(l) describe and explain all significant changes, if any, as against the traded PLCs previous remuneration policy,

(m) describe and explain how the remuneration policy takes into account

(i) the votes and views of shareholders on the policy, and

(ii) any remuneration reports since the most recent vote on the remuneration policy, and

(n) set out the elements, if any, of the policy from which the traded PLC may derogate in accordance with subsection (8), and the procedural conditions required for such a derogation.

(7) (a) A traded PLC shall, as soon as practicable after the holding of a remuneration vote, publish on its website, free of charge

(i) the remuneration policy to which the vote related,

(ii) the date of the remuneration vote, and

(iii) the results of the remuneration vote in accordance with section 1110.

(b) Where a remuneration policy is approved by a remuneration vote, the traded PLC shall maintain the information published under paragraph (a) on its website, free of charge, for as long as the remuneration policy to which the vote related is applicable.

(8) Notwithstanding any other provision of this section, a traded PLC may temporarily derogate from its remuneration policy where

(a) doing so is necessary in exceptional circumstances, to serve the long-term interests and sustainability of the traded PLC as a whole or to assure its viability, and

(b) the derogation is in accordance with the procedural conditions and other provisions on derogation set out in the remuneration policy.

(9) In this section, a reference to "director" includes, in addition to the meaning assigned to that expression by section 2(1), a reference to

(a) a chief executive officer of a traded PLC, and

(b) a deputy chief executive officer of a traded PLC,

where such positions exist in relation to a traded PLC and by whatever name called.

(10) This section applies, in so far as it relates to a traded PLC, to the traded PLCs financial years commencing on or after 10 June 2019.]

Annotations

Amendments:

F757

Inserted (30.03.2020) by European Union (Shareholders’ Rights) Regulations 2020 (S.I. No. 81 of 2020), reg. 7, in effect as per reg. 1(3).