London Stock Exchange this week announced a consultation on the AIM Rules a which is open until 15 January 2010. The proposals will see all AIM companies obliged to disclose details of directors' remuneration on an individual basis, as the rules catch up with the actual practice of most leading AIM companies. The UK Companies Act does not currently require full individual disclosure for all directors, except where a company is quoted (this definition does not include AIM).

The proposed amendment to AIM Rule 19 will require an AIM company to provide disclosure of directors’ remuneration in its annual audited accounts. Implementation is planned to be effective for companies with a financial year end of 31 March 2010 or thereafter.

The following items for each director of the AIM company:
a) emoluments and compensation;
b) share options and other long term incentive plan details, including information on all outstanding options and/or awards and any gains made on exercise and/or vesting; and
c) value of any benefits through defined benefit or defined contribution pension schemes.

The specified disclosures are not as specific in nature as those under the UK Companies Act and there may be some concerns as to the likely quality of disclosures. However it must be acknowledged that a significant number of AIM companies already provide this information as a matter of best practice, with many also proposing their remuneration reports for a shareholder vote.

The same consultation also includes proposed amendments to the guidance notes to AIM Rules 14 and 19 to provide all AIM companies the option to use electronic communications to send accounts and admission documents to shareholders.

Responses or queries on this consultation should be sent on or before 15 January 2010 by e-mail to: aimnotices@londonstockexchange.com

Further Reading

AIM Notice 35 - Consultation announcement