The code will apply to accounting periods on or after 1 October 2014. Companies either have to follow the new rules or explain satisfactorily to the FRC how they intend to impose their own regulatory measures. The code has worked on this basis for more than 20 years.
The main change to executive remuneration is that companies are urged to put in place measures to "recover or withhold variable pay" when appropriate.
It also recommends looking at increasing "vesting and holding periods" for this pay. Effectively, executive bonuses will be deferred for longer and can be recovered after a longer period.
The code also calls on companies, led by the remuneration committee, to ensure that remuneration policies are designed with the long-term success of the business in mind.
This is part of a wider principle of the code to create a "tone at the top", an instruction for directors to instil cultures and values through their own behaviour.
FRC CEO Stephen Haddrill said the aim of the updated code is to "strengthen the focus of companies and investors on the long-term".
"The changes on remuneration also focus companies on aligning reward with the sustained creation of value," he added.
