Remuneration in AIM companies – some further thoughts

Earlier this year, we highlighted some thoughts around changes to remuneration reporting bought in by changes in the QCA Corporate Governance Code “the Code” (read the article here).

To help support this, the QCA recently issued three new boardroom guides, QCA new series of boardroom guides , (which we are pleased to say that MM&K provided input into the remuneration guide).

Remuneration – both designing and reporting it – is likely to remain a hot topic.

In terms of reporting, we have had a series of recent conversations with UK based “Proxy Agents” who have indicated that they will definitely be reviewing the wave of remuneration policies that they are expecting AIM companies to be sending out to shareholders for an advisory vote this upcoming year.

This is significant as, historically, many (perhaps even the majority of) AIM companies took advantage of the lighter reporting standards in place to not disclose remuneration strategies.  The newer requirement to “comply or explain” about remuneration policies may expose AIM companies to a level of external scrutiny that they may not be familiar with.

As a result, those responsible for producing the report will need to understand what level of disclosures are required and will best serve the specific needs and circumstances of the business.

In terms of remuneration design, the recent publication by the CBI highlighting that they consider remuneration structures need to evolve, as a cornerstone of any revitalisation of the public equity markets, is likely to be a precursor to significant discussions CBI –  How to revitalise UK public equity markets with the key question around whether such changes will embolden remuneration committees (we will explore the points made by the CBI in a future news article).

If the above matters resonate and you would like to discuss how MM&K could assist you with developing your approaches in these areas – please contact Stuart James (stuart.james@mm-k.com) in the first instance.

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