Recent Developments for UK PLCs — July 2025

Refreshed Guidance Offers Opportunities to Streamline Directors’ Remuneration Reporting

On 5 June 2025, the GC100 and Investor Group published an updated version of their Directors’ Remuneration Reporting Guidance. This revision reflects evolving best practices and incorporates changes introduced by the Companies (Directors’ Remuneration and Audit) (Amendment) Regulations 2025 (the 2025 Regulations). Effective from 11 May 2025, the 2025 Regulations removed most requirements imposed by the implementation of an EU Directive in 2019, which were largely duplicative of existing UK requirements.

The updated guidance also provides clarification on overlapping requirements of the UK Corporate Governance Code (the Code), particularly concerning significant votes against resolutions, employee consultations, and workforce pay and conditions.

Key changes within the updated guidance include new guidance on:

• Engagement with shareholders and consideration of shareholders’ views — highlights the Code requirement for disclosure of shareholder engagement and the impact this has had on remuneration policy and outcomes. The guidance describes the content and formulation of these disclosures.
• Environmental, social, and governance (ESG) measures in variable pay — noting that ESG measures are increasingly being used in variable pay, the guidance provides practice points on selecting ESG metrics (i.e., these should relate to operational or strategic objectives that promote long-term value creation) and how to reflect the company’s wider ESG corporate strategy in variable pay.
• Consideration of general workforce pay — refers to the Code provisions that require consideration of workforce pay when setting the policy for executive remuneration and the disclosure of workforce engagement. The guidance provides suggestions on how to formulate these disclosures, with examples including disclosures on pay distribution across the workforce and incorporating granular detail, such as reporting on staff with pay awards over a certain threshold.
• Potential windfall gains arising from incentive awards — notes that where there has been a material fall in share price during the period leading up to the grant of the LTIP award, investors would generally expect the company to consider reducing the grant size to prevent the potential of windfall gains at vesting. The decisions by remuneration committees to reduce or not reduce the grant sizes should be clearly disclosed.

Reporting teams in UK-listed companies are encouraged to review the new guidance, which offers significant opportunities to streamline disclosures within their directors’ remuneration reports for financial years commencing on or after 11 May 2025, due to the removal of duplicative requirements under the 2025 Regulations, as highlighted in the guidance.

Upper Tribunal Ruling Highlights Personal Liability Risks for Directors From Disclosure Breaches

On 16 June 2025, the Upper Tribunal upheld the FCA’s decision to impose fines on the former CEO and CFO of Metro Bank for their involvement in the company’s breaches of the Listing Rules. The Tribunal determined that those individuals were “knowingly concerned” in the breaches, which involved the publication of materially incorrect financial information.

The Upper Tribunal imposed fines of £167,325 and £100,950 on those individuals, respectively. These fines were reduced by 25% in comparison with the original FCA penalty to account for mitigating factors, including the individuals’ cooperation with the FCA and steps they took to remediate the breach.

Key takeaways for listed companies:

• The ruling serves as a stark reminder of the importance of accurate and complete disclosures to the market.
• Executives should be aware of their responsibilities and potential liabilities in relation to Listing Rules compliance. The finding of “negligence” was sufficient to incur personal liability; the FCA did not allege that either individual acted deliberately or recklessly.
• Executives seeking to rely on independent legal advice that the activity concerned was not in contravention (e.g., to bring the case that they were not “knowingly concerned” in the disclosure breaches) must ensure that the advice was based on a correct and complete factual matrix. In short, the client needs to provide accurate and complete information.

UK Government Outlines Proposals on new Sustainability Reporting Standards and Climate Transition Planning

On 25 June 2025, the UK government launched three consultations as part of London Climate Action Week, which are intended to form key parts of the government’s programme to make the UK the “sustainable finance capital of the world”.

 The three consultations focus on:

• the approaches to mandating UK-listed companies (and other regulated entities) to develop and implement transition plans that align with the 1.5°C goal of the Paris Agreement. The government is considering leveraging the existing work undertaken by the Transition Plan Taskforce (TPT), which published its final framework in October 2023;
• new UK Sustainability Reporting Standards (i.e., the UK-endorsed ISSB Standards), which seek to provide clear, comparable information for investors on sustainability-related financial risks and opportunities, enabling them to make informed investment decisions. UK-listed companies and certain large private companies will likely be required to report against these new standards; and
• developing a voluntary registration regime for the providers of assurance of sustainability reporting.

The three consultations will close on 17 September 2025, with the responses informing upcoming drafts of the relevant UK legislative decisions. We expect the FCA to launch its own consultation on sustainability disclosure requirements for UK-listed companies in due course. For further details, please see this Latham article.

FCA Launches PISCES Sandbox

On 10 June 2025, the FCA unveiled its final rules for the Private Intermittent Securities and Capital Exchange System (PISCES), following a comprehensive consultation process. The proposals mark a significant step in the development of a regulated platform for trading private company shares, designed to operate within a sandbox environment for five years.

The finalised framework aims to foster innovation and competition among a variety of PISCES models, while ensuring appropriate investor protections based on a “private-plus” approach. For further details, see our Latham blog post.

Latham Spinoffs Guide — New Edition

We are excited to announce an updated release of our comprehensive spinoffs guide, “Spinoffs Demystified”, along with an updated LW.com landing page dedicated to our spinoff expertise. In a spinoff, a public company separates one or more of its businesses into a new, publicly traded company.

These resources provide essential insights and guidance relevant to spinoff transactions worldwide.