2.03 The remuneration report's ten-year shareholder return graph no longer compares against a broad equity market index
UK Company A · a UK-listed medical technology group · Compliance or disclosure gap
In brief
The law requires the remuneration report to plot the company's total shareholder return (TSR) over ten years against a holding in a broad equity market index, and to name the index and say why it was chosen. The 2025 report plots TSR only against the S&P [n] Healthcare Medical Devices subset, chosen because [wording masked]', and the chart legend describes the line as medical devices comparators still trading. The 2024 report used the [index], 'a broad equity index', and showed the peer group only as an extra chart; the 2025 report drops the broad-market graph.
The evidence, as filed
Screenshot withheld to protect the company’s identity: Annual Report 2025, page 189; Annual Report 2024, page 168; Annual Report 2024, page 169. Their wording or layout could lead back to the company even with names and figures masked; the evidence list below records what each page shows.
What the report shows, and what the rule requires
| What the annual report shows | What the rule requires |
|---|---|
| What the annual report shows Ten-year and three-year TSR graphs against the S&P [n] Healthcare Medical Devices subset (legend: '[wording masked] 2012'); no graph against a broad equity market index; text says '[amount] invested' while the charts are measured in [currency]. | What the rule requires A ten-year TSR line graph against a broad equity market index (for example the [index], as in the 2024 report), with the index named and the reason given; the medical devices peer comparison may be shown in addition. |
The rule
SI 2008/410 Schedule 8 paragraph 18(1)
Version relied on: Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410), in force from April 2008, as amended (the directors’ remuneration report Schedule 8 as substituted from October 2013); revised text, legislation.gov.uk
a hypothetical holding of shares made up of shares of the same kinds and number as those by reference to which a broad equity market index is calculated
SI 2008/410 Schedule 8 paragraph 18(1)(b)
Version relied on: Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410), in force from April 2008, as amended (the directors’ remuneration report Schedule 8 as substituted from October 2013); revised text, legislation.gov.uk
state the name of the index selected for the purposes of the graph and set out the reasons for selecting that index
Why it applies here: the statutory graph needs a broad equity market index; a sector subset chosen as performance peers, and drawn as a set of surviving comparators, is a peer comparison, not a broad market index, so the required graph is missing in 2025 and the report departs from its own 2024 practice.
Why it matters
- Shareholders lose the statutory comparison of the company's return with the broad market against which pay is judged; the comparison shown is against surviving peers chosen by the company.
- A sector index may be shown in addition to the broad index, not instead of it.
Shareholders lose the statutory comparison of the company's return with the broad market against which pay is judged, and the comparison shown is against surviving peers chosen by the company.
Exposure
A remuneration report that does not contain the Schedule 8 graph is open to an FRC Corporate Reporting Review enquiry and an undertaking to correct the next report; no fine is expected for an item of this kind.
Our workings
the TSR section of the 2025 report compares [amount] invested in the company's shares with [amount] 'invested in the S&P [n] Healthcare Medical Devices subset index' and says the index was chosen because [wording masked]'. Both charts are labelled 'measured in [currency]' and the line is captioned '[wording masked] 2012'. No other TSR graph appears in the remuneration report; the [index] is mentioned in the report only as a director's former employers, as the comparator group of the performance share plan, as a market-capitalisation peer set for the policy, in the history section and in the glossary. The 2024 report plotted TSR against the [index], which it called '[wording masked] added the medical devices peer chart separately (Annual Report [amount].168-169).
| Item | 2024 report | 2025 report |
|---|---|---|
| Comparator in the TSR graph | [index], described as a broad equity index | S&P [n] Healthcare Medical Devices subset, described as most relevant performance peers |
| Medical devices peer chart | Shown in addition to the [index] graph | The only comparison shown |
| What the plotted line is | The index | Medical devices comparators [wording masked] 2012 |
| Currency of the chart | Sterling | [currency], while the text says [amount] invested |
Management’s best defence, and our reply
The company could say that the law does not define 'broad', that the S&P Global [n] is a broad global index and its medical devices subset is a published index, and that a sector comparison is more informative for a global medical technology company whose remuneration plans use the same peers. It could add that the [index] graph was simply replaced by a more relevant one and nothing is hidden. The answer: the provision asks for a broad equity market index precisely so that the comparison is not with chosen peers; the company itself chose the subset because [wording masked]', the plotted line is a set of surviving comparators rather than the index, and in 2024 the company treated the [index] as the broad index and the peer chart as an extra. A sector subset can be shown in addition, not instead.
The fix
- Restore the broad-market graph: 'The chart shows the value at [date] of [amount] invested in the Company shares on [date] compared with [amount] invested in the [index], chosen as a broad equity market [wording masked]'; keep the medical devices peer chart as an additional chart and state its currency consistently.
Evidence relied on
| # | What it shows | Type | Where |
|---|---|---|---|
| 1 | The 2025 graph compares TSR with the S&P [n] Healthcare Medical Devices subset | Document | Annual Report 2025, page 189 |
| 2 | Reason given: the index is the company's performance peers, not the broad market | Document | Annual Report 2025, page 189 |
| 3 | The plotted line is a set of surviving medical devices comparators | Document | Annual Report 2025, page 189 |
| 4 | Chart measured in [currency] although the text speaks of [amount] invested | Document | Annual Report 2025, page 189 |
| 5 | 2024 report: the statutory graph used the [index] as a broad equity index | Document | Annual Report 2024, page 168 |
| 6 | 2024 report: the medical devices peer chart was shown in addition | Document | Annual Report 2024, page 169 |
Absence check
- Document
- Annual Report 2025
- Where it would appear
- [wording masked]
- What is missing
- a ten-year TSR line graph against a broad equity market index
- Pages looked at
- p.147-193 (directors' remuneration report), page images of p.189-190
- Result
- '[index]' hits p.105 (directors' former employers), [n] and [n] (PSP comparator group and policy benchmarking peers), 182-183 (PSP TSR comparator group), [n] (company history) and [n] (glossary); 'FTSE100' hits p.163 and [n] (PSP comparator group). None is a TSR graph against a market index. 'broad equity', 'equity market index', '[index]' and 'market index' have no hits.
Prepared by Pramanex from the company’s published annual reports, without the company’s involvement, to show how an annual report review reads. The company is not named, and nothing on this page is a statement about any identifiable company. Observations are not an audit, review or other assurance engagement, and not legal advice. A regulator-style question is a question, not a conclusion.
Want this on your own annual report, before it is published?
Start with three free findings on your latest published annual report, or talk to us about a fixed-fee pre-publication review.
Your annual report will be in draft before the year-end audit.
Have it read before it is published.
Under NDA, with our reviewer on your insider list under UK MAR.