The end of the annual pay vote? The UK’s proposed reporting overhaul.

On 7 September 2026, the UK government published an open consultation titled  Modernising Corporate Reporting to support long-term economic growth. The proposed overhaul targets reform of the UK corporate reporting system including significant simplification of remuneration disclosures.

This direction of travel is not new. It builds on growing momentum to boost UK market competitiveness sparked when the CEO of the London Stock Exchange released an article critiquing constraints on UK executive pay in May 2023.

The consultation closes on 30 November 2026 with remuneration specific consultation questions posed to companies and shareholders.

Key Takeaways

• Potential removal of the annual advisory vote on the remuneration report given remuneration is already approved under the triennial vote on remuneration policy.
• Removal or streamlining of requirements already covered under other reporting provisions including the UK Corporate Governance Code to avoid duplication.
• Removal of other prescriptive and granular disclosures, including the CEO-employee pay ratio.

The UK consultation ultimately seeks to strike a balance between relieving administrative burdens by simplifying reporting and retaining what is useful for shareholder decision making. Whether they get it right and how material the changes are is yet to be seen.

What is the most significant change for executive and director remuneration?

As in Australia, the UK has an annual non-binding advisory vote on the remuneration report. However, unlike Australia, the UK also has a triennial binding vote on executive remuneration policy. The policy vote concerns the design of executive pay frameworks, while the annual vote covers pay outcomes including performance adjustments for that financial year.

As shareholders already approve the policy, the consultation proposes eliminating the advisory annual vote. For reporting on how the policy will be implemented in the upcoming year, the government proposes either removing this requirement or only requiring an outline of how the policy is being implemented when there is a material update (such as a new executive).

The rationale is to save shareholder and company time and resources at annual general meetings by reducing repeated voting on pay practices that are already approved through the forward-looking triennial policy vote. 

What else does the consultation propose to remove?

The consultation also proposes removing other reporting requirements on the basis that they do not provide financially material or decision-useful information for investors, or they are already covered by related provisions in the UK Corporate Governance Code which applies a ‘comply or explain’ framework.

The UK Corporate Governance Code already has provisions relating to the work of the remuneration committee, including how it has engaged with shareholders and employees, how it addresses shareholder dissent, disclosure of malus and clawback policies and alignment of director pay with employees. As such, disclosure requirements on these areas are proposed for removal, as they will remain within the Code.

Other disclosure requirements proposed for removal include the relative importance of spend on pay, executive directors’ pay prior to a company becoming listed, and the illustration of long-term incentive plan outcomes in the event of 50% share price appreciation.

The government is also seeking views on the removal of the lengthy CEO-employee pay ratio disclosure requirement. UK companies with over 250 employees must annually disclose the ratio of their CEO’s pay to the lower quartile, median and upper quartile of their UK employees – going back 9 reporting periods. The government notes that the ratio fluctuates heavily based on variable incentive outcomes and rationale for any differences tends to be ‘boilerplate’.

The requirement to disclose the results of annual shareholder votes is also proposed for removal as it is already required under section 341(1) of the Companies Act 2006.

Which requirements are staying?

The government proposes keeping information deemed investor critical, aligning reporting much more with ASX standards:

• the annual single figure table (similar to the statutory tables for the ASX);
• the statement by the Remuneration Committee Chair summarising key decisions or proposals including use of discretion;
• details of backwards looking performance measures (i.e. for the financial year of the annual report);
• the 10-year performance graph showing TSR and CEO pay; and
• the forward-looking directors’ remuneration policy approved triennially.

Although it is being retained, the government proposes to refine the existing methodology for calculating the total single figure of remuneration (the sum of total remuneration in the tables) and welcomes views on how there can be greater clarity on what is included in the calculation.

The government also welcomes views on whether executive director shareholdings need to be included in the remuneration report as they are available through other sources (such as London Stock Exchange Regulatory News Announcements, which are equivalent to ASX Announcements).

So what does it mean?

The proposed updates represent a significant simplification and streamlining of disclosure and reporting requirements for UK companies. Given Australian governance expectations tend to reflect many UK standards, many may be hopeful that the governance simplification pendulum swings our way. Guerdon Associates will continue to monitor developments and provide updates on how many of the proposed changes are successfully implemented.