Remuneration Committee Spotlight Q1 2026 

In this first edition of our new quarterly series of briefings, we outline some of the main issues likely to be front-of-mind for listed company Remuneration Committees in Q1 2026 – particularly those with a calendar year end.

Particular areas of focus / disclosure may include:

• Increases to levels of pay should be clearly explained and justified, especially when based on benchmarking (include details of, and rationale for, peer groups used, including details of relative performance and positioning against peers)
• Ensure rationale for changes to directors’ remuneration structure (including to NED fees, for example in light of recent clarifications provided by the FRC in relation to share-based arrangements) or to performance metrics (such as changes to the use or inclusion of ESG measures and increased scope for discretion) is linked to the Company’s strategy and has the support of major shareholders
• Summarise the shareholder engagement process, including main themes in the feedback received and its outcomes
• Describe how the RemCo has evaluated the possibility of windfall gains for LTIPs that are vesting, and any resulting exercise of discretion
• Ensure decision-making for Directors is consistent with decisions for the wider workforce - particularly important this year given investor / proxy sentiment
• Take a step back to verify that that the overall pay structure supports / balances business strategy, shareholder experience, long term value creation and risk management – within the context of ongoing geopolitical / economic uncertainty

Particular areas of focus may include:

• Tracking proxy votes / levels of support (including for new Directors’ Remuneration Policy)
• Being prepared to respond (quickly) to draft reports issued by proxy advisors – Investment Association, ISS, Glass Lewis and PIRC, including by providing additional communication / disclosure (e.g. on website) where material shareholder / proxy concerns are apparent
• Drafting a detailed AGM Q&A document
• Maintaining effective internal communications (across RemCo / Directors / management / workforce where necessary)

• Finalise executive director salary increases – taking account of investors’ desire for these to be no higher than workforce increases
• Review FY2025 performance against targets and in-the-round
• Review metrics, weightings and targets for FY2026 incentives
• Review compliance with share ownership requirements for Directors and senior management
• Review malus and clawback provisions: grounds/enforceability and whether incorporated into all contracts and plan documents
• Update RemCo terms of reference