Greg Campbell
Business Shapers
19 September 2014

The Financial Reporting Council’s new rules explained

The Financial Reporting Council (“FRC”) is responsible for developing the Corporate Governance Rules for the 1,300 largest companies in the UK.  Executive remuneration has been a hot topic for many years, most particularly in the banking sector, but the FRC’s proposed new rules mark a decisive attempt to move executive remuneration in the plc sector closer to the rules that have applied to bankers’ pay for the last six years.

At the core of the new rules is a drive to ensure that compensation paid to executives is properly aligned with the interests of the company (which broadly means shareholders).  As with bankers’ compensation, the way that the FRC have looked to achieve this goal is through four tools:

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