News

The London Stock Exchange has today issued AIM Notice 36, which implements the recently proposed changes to the AIM Rules for Companies relating to:

• disclosure of directors' remuneration; and
• electronic communications with shareholders.

Directors' Remuneration

An AIM Company's annual audited accounts must now include details of the remuneration earned by each director in respect of the relevant financial year.

The information must include:

• all emoluments and compensation, including any cash or non-cash benefits received by each director;
  
• any share options or other long term incentive plan details (and details of any outstanding options or awards); and
  
• the value of any pension scheme contributions.

Currently companies are only required to disclose the aggregate remuneration and the remuneration of the highest paid director.

This change to the AIM Rules for Companies will give shareholders a better understanding of the directors' individual remuneration packages. However it does not go as far as the requirement for a full remuneration report set out in the Listing Rules and does not require the company to explain its remuneration policy or the justification for any particular part of the remuneration package. AIM companies that wish to comply with the highest standards of corporate governance will still need to give more information than strictly required by the amended AIM Rules for Companies.

This amendment to the rules takes effect for companies whose financial years end on or after 31 March 2010.

Electronic Communications

The AIM Rules already provide that companies may circulate annual accounts and AIM Admission Documents electronically if they do so in accordance with the Companies Act 2006. This only benefited UK companies, so the latest amendment allows companies outside the UK to send these documents to shareholders using electronic means. The changes to the guidance notes set out the procedure to be followed, which is based on the provisions of the Companies Act 2006.

The shareholders must approve the use of electronic communications by passing a resolution at a general meeting and then the company must write to each shareholder requesting their consent to the use of electronic communications; if a shareholder does not object within 28 days they are deemed to have consented.

Shareholders must still be contacted to notify them of any new electronic communication posted on the company's website and may at any time request to receive documents in writing.

This change to the AIM Rules for Companies takes effect immediately.

For further information and advice regarding AIM and our services for AIM Companies and advisers, please contact Andrew Chadwick on +44 (0) 207 689 7116.

AIM Notice 36 and the revised AIM Rules for Companies can be found on the London Stock Exchange's website.