Setting the Tone for 2026: Insights from September Year-End Disclosures

With annual reports now published by 20 FTSE 350 companies, emerging pay and incentive trends for 2026 are beginning to take shape. We have summarised the key themes below, with the analysis based on six FTSE 100 and 14 FTSE 250 companies.

Remuneration Policy Reviews: Continued Changes to Structure and Quantum

Six companies have introduced new remuneration policies for FY26. Of these:

• One company has introduced a hybrid plan – this follows greater openness from investors around the design of remuneration packages, and 11 companies introducing a hybrid plan in 2025
• Five companies have increased their incentive quantum – two increased bonus quantum, one increased LTIP quantum, and two increased both. Where increases were made, these were generally below 100% of salary
• Two companies have reduced their bonus deferral requirements once shareholding guidelines have been met and one company has removed the deferral entirely in this scenario. In total, 11 of the companies in the sample now link deferral to shareholding guidelines being met

Salary Increases Generally Back Towards Wider Workforce Level

The majority of FY26 base salary increases have been in line with or below the wider workforce rate.

Four CEOs and four CFOs were awarded increases above those for the wider workforce, with increases ranging from around 10% to 20%. These decisions were generally supported by detailed peer benchmarking, strong individual or company performance, and expanded responsibilities in the role.

Incentive Outcomes Remain Fairly Strong, With Some Examples of Discretion

Bonus outcomes remain fairly strong at around 65% of maximum opportunity, although slightly lower than in the previous year. Median PSP vesting stands at around 67% of maximum, broadly in line with recent years.

Discretion was applied by three companies to three bonus outcomes, and one Performance Share Plan vesting outcome. In each case, the formulaic result was reduced or the targets were adjusted. Where discretion was applied, this was typically to reflect the shareholder and/or employee experience, or where financial metrics had not achieved threshold performance levels, but non-financial metrics had.

Looking Ahead

The market has seen significant change over the last couple of years. We predict this will continue throughout 2026, where we anticipate around half of FTSE 350 companies will put forward a new remuneration policy, as companies continue to update their remuneration practices to reflect the ongoing debate on the competitiveness of the UK market.

As the 2026 reporting season progresses, Farient will continue to monitor and report on market developments. Should you wish to discuss these updates, please contact either Stephen Cahill (stephen.cahill@farient.com), David Cohen (david.cohen@farient.com), Fiona Maurice (fiona.maurice@farient.com) or Alex Styles-Morris (alex.styles-morris@farient.com).