Paragraph 18 Performance graph and tableF1
The directors’ remuneration report must—
contain a line graph that shows for each of—
a holding of shares of that class of the company’s equity share capital whose listing, or admission to dealing, has resulted in the company falling within the definition of “quoted company” F2..., and
a hypothetical holding of shares made up of shares of the same kinds and number as those by reference to which a broad equity market index is calculated,
a line drawn by joining up points plotted to represent, for each of the financial years in the relevant period, the total shareholder return on that holding; and
state the name of the index selected for the purposes of the graph and set out the reasons for selecting that index.
The report must also set out in tabular form the following information for each of the financial years in the relevant period in respect of the director undertaking the role of chief executive officer—
total remuneration as set out in the single total figure table;
the sum set out in the table in column headed “c” in the single total figure table expressed as a percentage of the maximum that could have been paid in respect of that component in the financial year; and
the sum set out in column headed “d” in the single total figure table restated as a percentage of the number of shares vesting against the maximum number of shares that could have been received, or, where paid in money and other assets, as a percentage of the maximum that could have been paid in respect of that component in the financial year.
For the purposes of sub-paragraphs (1), (2) and (6), “relevant period” means the specified period of financial years of which the last is the relevant financial year.
Where the relevant financial year—
is the company’s first financial year for which the performance graph is prepared in accordance with this paragraph, “specified” in sub-paragraph (3) means “five”;
is the company’s “second”, “third”, “fourth”, “fifth” financial year in which the report is prepared in accordance with this Schedule, “specified” in sub-paragraph (3) means “six”, “seven”, “eight”, “nine” as the case may be; and
is any financial year after the fifth financial year in which the report is prepared in accordance with this Schedule, “specified” means “ten”.
Sub-paragraph (2) may be complied with by use of either—
a sum based on the information supplied in the directors’ remuneration reports for those previous years, or,
where no such report has been compiled, a suitable corresponding sum.
For the purposes of sub-paragraph (1), the “total shareholder return” for a relevant period on a holding of shares must be calculated using a fair method that—
takes as its starting point the percentage change over the period in the market price of the holding;
involves making—
the assumptions specified in sub-paragraph (7) as to reinvestment of income, and
the assumption specified in sub-paragraph (9) as to the funding of liabilities; and
makes provision for any replacement of shares in the holding by shares of a different description;
and the same method must be used for each of the holdings mentioned in sub-paragraph (1).
The assumptions as to reinvestment of income are—
that any benefit in the form of shares of the same kind as those in the holding is added to the holding at the time the benefit becomes receivable; and
that any benefit in cash, and an amount equal to the value of any benefit not in cash and not falling within paragraph (a), is applied at the time the benefit becomes receivable in the purchase at their market price of shares of the same kind as those in the holding and that the shares purchased are added to the holding at that time.
In sub-paragraph (7) “benefit” means any benefit (including, in particular, any dividend) receivable in respect of any shares in the holding by the holder from the company of whose share capital the shares form part.
The assumption as to the funding of liabilities is that, where the holder has a liability to the company of whose capital the shares in the holding form part, shares are sold from the holding—
immediately before the time by which the liability is due to be satisfied, and
in such numbers that, at the time of the sale, the market price of the shares sold equals the amount of the liability in respect of the shares in the holding that are not being sold.
In sub-paragraph (9) “liability” means a liability arising in respect of any shares in the holding or from the exercise of a right attached to any of those shares.
Annotations
Textual amendments
- F1
Sch. 8 substituted (1.10.2013) by The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 (S.I. 2013/1981), regs. 1, 3, Sch. (with reg. 4)
- F2
Words in Sch. 8 para. 18(1)(a)(i) omitted (11.5.2025 in relation to accounts and reports for a financial year of a company beginning on or after that date) by virtue of The Companies (Directors' Remuneration and Audit) (Amendment) Regulations 2025 (S.I. 2025/439), regs. 1(2), 2(3), 12(3)(f)
Notes on Schedule 8
Textual amendments
- F2
Words in Sch. 8 heading omitted (11.5.2025 in relation to accounts and reports for a financial year of a company beginning on or after that date) by virtue of The Companies (Directors' Remuneration and Audit) (Amendment) Regulations 2025 (S.I. 2025/439), regs. 1(2), 2(3), 12(3)(a)