On 15 December 2009, the London Stock Exchange published AIM Notice 35, detailing proposed amendments to the AIM Rules. On 17 February 2010, AIM Notice 36 was published with a new version of the AIM Rules, which are effective from this date
It was proposed that AIM Rule 19 should be amended to require an AIM company to disclose details of each director’s remuneration in its annual audited accounts. AIM Notice 36 sets out details of the consultation on the proposed amendments under AIM Notice 35 and confirms that these will be made.
An AIM company must publish annual audited accounts which must be sent to its shareholders not later than six months after the end of the financial year to which they relate.
Currently disclosure of directors’ remuneration is not a requirement. AIM Rule 19 only requires disclosure of certain transactions with related parties.
Details required to be disclosed will include:
- Directors’ emoluments and compensation;
- 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
- The value of benefits through defined benefit or defined contribution pension schemes.
Disclosure will be required for each director of the AIM company.
The amendment to AIM Rule 19 will bring AIM listed companies in line with the disclosure and reporting obligations set out in the Companies Act 2006 and which currently apply only to UK companies quoted on the official list of the UKLA.
Although the amendment will be more onerous for AIM companies than the current requirements, the amendment is logical, and therefore not entirely unexpected, in light of the increasing focus on corporate governance and the area of remuneration in particular.
The new disclosure of directors’ remuneration requirement under Rule 19 will apply to AIM companies with financial years ending on, or after, 31 March 2010.