Companies Act 2006

Chapter 9 U.K. Quoted companies [F1 and traded companies]: members' approval of directors' remuneration report

Textual Amendments

F1 Words in Pt. 15 Ch. 9 heading inserted (10.6.2019) by The Companies (Directors Remuneration Policy and Directors Remuneration Report) Regulations 2019 (S.I. 2019/970), regs. 1, 18

439 Quoted companies [F2 and traded companies]: members' approval of directors' remuneration report U.K.

(1) A [F3 company to which this section applies] must, prior to the accounts meeting, give to the members of the company entitled to be sent notice of the meeting notice of the intention to move at the meeting, as an ordinary resolution, a resolution approving the directors' remuneration report for the financial year[F4 other than the part containing the directors' remuneration policy (as to which see section 439A).]

[F5 (1A) This section applies to—

(a) a quoted company, and

(b) a traded company (as defined by section 360C) that is not a quoted company.]

(2) The notice may be given in any manner permitted for the service on the member of notice of the meeting.

(3) The business that may be dealt with at the accounts meeting includes the resolution.

This is so notwithstanding any default in complying with subsection (1) or (2).

(4) The existing directors must ensure that the resolution is put to the vote of the meeting.

(5) No entitlement of a person to remuneration is made conditional on the resolution being passed by reason only of the provision made by this section.

(6) In this section—

• “the accounts meeting” means the general meeting of the company before which the company's annual accounts for the financial year are to be laid; and

• “existing director” means a person who is a director of the company immediately before that meeting.

Textual Amendments

F2 Words in s. 439 heading inserted (10.6.2019) by The Companies (Directors Remuneration Policy and Directors Remuneration Report) Regulations 2019 (S.I. 2019/970), regs. 1, 19(a)

F3 Words in s. 439(1) substituted (10.6.2019) by The Companies (Directors Remuneration Policy and Directors Remuneration Report) Regulations 2019 (S.I. 2019/970), regs. 1, 19(b)

F4 Words in s. 439(1) inserted (1.10.2013) by Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 79(3), 103(3); S.I. 2013/2227, art. 2(h)

F5 S. 439(1A) inserted (10.6.2019) by The Companies (Directors Remuneration Policy and Directors Remuneration Report) Regulations 2019 (S.I. 2019/970), regs. 1, 19(c)

Modifications etc. (not altering text)

C1 Ss. 418-469 applied (with modifications) (1.10.2009) by The Unregistered Companies Regulations 2009 (S.I. 2009/2436), regs. 3-5, Sch. 1 para. 10 (with transitional provisions and savings in regs. 7, 9, Sch. 2)

[F6 439A Quoted companies [F7 and traded companies]: members' approval of directors' remuneration policy U.K.

(1) A quoted company [F8 or unquoted traded company] must give notice of the intention to move, as an ordinary resolution, a resolution approving the relevant directors' remuneration policy—

(a) at the accounts meeting held in the first financial year which begins on or after the day on which the company becomes a quoted company [F9 or (as the case may be) an unquoted traded company], and

(b) at an accounts or other general meeting held no later than the end of the period of three financial years beginning with the first financial year after the last accounts or other general meeting in relation to which notice is given under this subsection.

(2) A quoted company [F10 or unquoted traded company] must give notice of the intention to move at an accounts meeting, as an ordinary resolution, a resolution approving the relevant directors' remuneration policy if—

(a) a resolution required to be put to the vote under section 439 was not passed at the last accounts meeting of the company, and

(b) no notice under this section was given in relation to that meeting or any other general meeting held before the next accounts meeting.

[F11 (2A) A quoted company or unquoted traded company must give notice of the intention to move at an accounts or other general meeting, as an ordinary resolution, a resolution approving the relevant directors’ remuneration policy if—

(a) a resolution required to be put to the vote under subsection (1) or (2) or this subsection was not passed at the last accounts or other general meeting of the company, and

(b) no notice under this section was given in relation to any other general meeting held before the next accounts meeting.]

(3) Subsection (2) does not apply in relation to a quoted company [F12 or unquoted traded company] before the first meeting in relation to which it gives notice under subsection (1).

(4) A notice given under subsection (2) [F13 or (2A)] is to be treated as given under subsection (1) for the purpose of determining the period within which the next notice under subsection (1) must be given.

(5) Notice of the intention to move a resolution to which this section applies must be given, prior to the meeting in question, to the members of the company entitled to be sent notice of the meeting.

(6) Subsections (2) to (4) of section 439 apply for the purposes of a resolution to which this section applies as they apply for the purposes of a resolution to which section 439 applies, with the modification that, for the purposes of a resolution relating to a general meeting other than an accounts meeting, subsection (3) applies as if for “accounts meeting” there were substituted “ general meeting ” .

(7) For the purposes of this section, the relevant directors' remuneration policy is—

(a) in a case where notice is given in relation to an accounts meeting, the remuneration policy contained in the directors' remuneration report in respect of which a resolution under section 439 is required to be put to the vote at that accounts meeting;

(b) in a case where notice is given in relation to a general meeting other than an accounts meeting—

(i) the remuneration policy contained in the directors' remuneration report in respect of which such a resolution was required to be put to the vote at the last accounts meeting to be held before that other general meeting, or

(ii) where that policy has been revised in accordance with section 422A, the policy as so revised.

(8) In this section—

(a) “ accounts meeting ” means a general meeting of the company before which the company's annual accounts for a financial year are to be laid;

(b) “directors' remuneration policy” means the policy of the company with respect to the matters mentioned in section 421(2A);]

[F14 (c) “unquoted traded company” means a traded company (as defined by section 360C) that is not a quoted company.]

Textual Amendments

F6 S. 439A inserted (1.10.2013) by Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 79(4), 103(3); S.I. 2013/2227, art. 2(h)

F7 Words in s. 439A heading inserted (10.6.2019) by The Companies (Directors Remuneration Policy and Directors Remuneration Report) Regulations 2019 (S.I. 2019/970), regs. 1, 20(a)

F8 Words in s. 439A(1) inserted (10.6.2019) by The Companies (Directors Remuneration Policy and Directors Remuneration Report) Regulations 2019 (S.I. 2019/970), regs. 1, 20(b)(i)

F9 Words in s. 439A(1)(a) inserted (10.6.2019) by The Companies (Directors Remuneration Policy and Directors Remuneration Report) Regulations 2019 (S.I. 2019/970), regs. 1, 20(b)(ii) (with reg. 2)

F10 Words in s. 439A(2) inserted (10.6.2019) by The Companies (Directors Remuneration Policy and Directors Remuneration Report) Regulations 2019 (S.I. 2019/970), regs. 1, 20(c)

F11 S. 439A(2A) inserted (10.6.2019) by The Companies (Directors Remuneration Policy and Directors Remuneration Report) Regulations 2019 (S.I. 2019/970), regs. 1, 20(d)

F12 Words in s. 439A(3) inserted (10.6.2019) by The Companies (Directors Remuneration Policy and Directors Remuneration Report) Regulations 2019 (S.I. 2019/970), regs. 1, 20(c)

F13 Words in s. 439A(4) inserted (10.6.2019) by The Companies (Directors Remuneration Policy and Directors Remuneration Report) Regulations 2019 (S.I. 2019/970), regs. 1, 20(e)

F14 S. 439A(8)(c) inserted (10.6.2019) by The Companies (Directors Remuneration Policy and Directors Remuneration Report) Regulations 2019 (S.I. 2019/970), regs. 1, 20(f)

440 Quoted companies [F15 and traded companies]: offences in connection with procedure for approval U.K.

(1) In the event of default in complying with section 439(1)[F16 or 439A(1)[F17 , (2) or (2A)]] (notice to be given of resolution for approval of directors' remuneration report[F18 or policy]), an offence is committed by every officer of the company who is in default.

(2) If the resolution is not put to the vote of [F19 the meeting to which it relates], an offence is committed by each existing director.

(3) It is a defence for a person charged with an offence under subsection (2) to prove that he took all reasonable steps for securing that the resolution was put to the vote of the meeting.

(4) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale.

(5) In this section—

• F20 ...

• “existing director” means a person who is a director of the company immediately before that meeting.

Textual Amendments

F15 Words in s. 440 heading inserted (10.6.2019) by The Companies (Directors Remuneration Policy and Directors Remuneration Report) Regulations 2019 (S.I. 2019/970), regs. 1, 21(a)

F16 Words in s. 440(1) inserted (1.10.2013) by Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 81(10)(a)(i), 103(3); S.I. 2013/2227, art. 2(h)

F17 Words in s. 440(1) substituted (10.6.2019) by The Companies (Directors Remuneration Policy and Directors Remuneration Report) Regulations 2019 (S.I. 2019/970), regs. 1, 21(b)

F18 Words in s. 440(1) inserted (1.10.2013) by Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 81(10)(a)(ii), 103(3); S.I. 2013/2227, art. 2(h)

F19 Words in s. 440(2) substituted (1.10.2013) by Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 81(10)(b), 103(3); S.I. 2013/2227, art. 2(h)

F20 Words in s. 440(5) omitted (1.10.2013) by virtue of Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 81(10)(c), 103(3); S.I. 2013/2227, art. 2(h)

Modifications etc. (not altering text)

C2 Ss. 418-469 applied (with modifications) (1.10.2009) by The Unregistered Companies Regulations 2009 (S.I. 2009/2436), regs. 3-5, Sch. 1 para. 10 (with transitional provisions and savings in regs. 7, 9, Sch. 2) (and the said Sch. 1 para. 10 is amended (with application in accordance with reg. 1(3) of the amending S.I.) by The Unregistered Companies (Amendment) Regulations 2013 (S.I. 2013/1972), regs. 1(2), 2(2)(a))