Non-Executive Director Remuneration in the UK Share options as an option?
UK non-executive directors (NEDs) have traditionally been paid fixed fees to protect their independence from executive management.
However, recent governance debates (particularly following the Financial Reporting Council’s 2025 guidance) have reopened the question of whether equity-based incentives, including share options, may sometimes be appropriate.
A recent IoD report highlighted growing concern that current remuneration does not reflect the complexity, time commitment, and liability of the role, while still emphasising the need to maintain independence from executive pay structures.
This paper now examines the case for including shares or share options in UK NED remuneration, and how evolving UK practice compares with the more equity-based approach long seen in the US.
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