NEW RULES to boost the quality of UK corporate reporting laid by government yesterday could soften how much information companies have to disclose about executive bonus targets.
The regulations, introduced by the Department for Business, Innovation and Skills, are designed to introduce more narrative reporting into complex company accounts to make them easier to understand.
Bonus targets for the current year can currently be excluded from accounts due to commercial sensitivity but now previous year targets can also be left out under the proposed regulations. The rules are set to tie in with plans for a binding shareholders’ vote on pay policy.
“Companies may be pleasantly surprised, as they had braced themselves for being forced to disclose full details of the targets that they used in the previous year,” FIT Remuneration Consultants partner Rory Cray said.
Consultants Ernst & Young also welcomed the move towards narrative reporting but said it was “a shame” the government had not pressed ahead with the idea for an online director’s statement to streamline annual accounts.