Financial Reporting Lab report on 'Reporting of pay and performance'
News types: Codes and Standards Announcements
Published: 5 March 2013
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The Financial Reporting Council (FRC) has today issued a Financial Reporting Lab (Lab) project report on ‘Reporting of pay and performance’ (PDF).
At the request of the Department of Business Innovation and Skills (BIS), the Lab has undertaken a second project on remuneration - this time exploring the views of investors and companies on two new aspects of the draft reporting regulations on remuneration:
- scenario charts demonstrating how directors’ pay varies with performance, and
- a chart comparing CEO pay based on the single figure for remuneration, with company performance, measured using Total Shareholder Return (TSR).
Views were also sought on certain aspects of the Lab’s first report 'A single figure for remuneration' (PDF)
Director of the Financial Reporting Lab, Sue Harding, said:
“This second project has again achieved significant agreement among participating members of the investor and corporate communities. Participants favour a simplified version of the scenario charts proposed by BIS. They also conclude that, rather than replacing the current five year TSR chart, this should be retained and be supplemented with a simple table setting out historic levels of CEO pay together with information on the level of performance-related elements of pay. We hope that BIS finds the conclusions in this report helpful in their decisions on remuneration reporting requirements”.
The Lab encourages readers of its reports to comment on their content and presentation. Any feedback will be taken into account in how the Lab approaches and reports on future projects. Please send any feedback to [email protected].