I begin this section with a commentary on the Resolution of the General Directorate of Registries and Notaries dated November 5, 2015, which answers a question that was generating some controversy in commercial doctrine, which was the one referring to whether the remuneration of the CEO, was subject to the principle of statutory reservation.
This is a deed of public registration of the corporate agreements of a company that regulates the remuneration of the directors and establishes the following:
Article 28.- Remuneration of Administrators: The position of Administrator will be free of charge, without prejudice to any remuneration that may be due to them for the provision of services by virtue of a relationship other than that of such position that has been established, as well as being reimbursed for any justified expenses incurred in connection with and in the exercise of their function. Notwithstanding the foregoing, the position of CEO of the company will be remunerated by all or any of the following concepts: (i) a fixed part, appropriate to the services and responsibilities assumed, (ii) a variable part, correlated with some indicator of the performance of the director of the Company, (iii) an assistance part, which will include the appropriate pension and insurance systems, and (iv) compensation in the event of separation or any other form of termination of the legal relationship with the Company not due to a breach attributable to the director.
The legal situation
The current regulation of remuneration derives from Law 31/2014, which modifies the Capital Companies Law to improve corporate governance, which, by unifying the regime of listed and non-listed companies, provides for two types of remuneration for directors and/or counselors. For the remuneration of directors or counselors “in their capacity as such” Statutory registration and approval of a maximum amount by the general meeting is required (art. 217.2 and 3 LSC and art. 529 septdecies LSC) and for executive directors the need to set the remuneration in a contract approved by two thirds of the members of the board is established, in which all the concepts for which the director can obtain remuneration for his executive functions must be detailed (art. 249. 3 and 4 LSC and art. 529 octodecies LSC).
Interpretation of the law
In the field of unlisted companies, this regulation generated certain suspicions among the first commentators, as they anticipated that a situation could arise, interpreting the law literally, such as that provided for in the statutory clause that gives rise to this comment, since according to the literal wording of arts. 217 and 249 LSC, it was said that it could happen that in the absence of a statutory remuneration clause or the statutory provision of the gratuity of the position of director, partners or shareholders could be surprised a posteriori with large remunerations agreed in the contracts of their executive directors; and the worst thing is that, not even with the presentation of the company accounts could the partners know the individualized detail of what their directors could have received because, according to what is established in the ninth provision in fine of art. 260 LSC, information on the remuneration of directors in capital companies may be given globally by remuneration concept without the need for an individualized detail of the remuneration earned by the directors..
And all this regardless of the fact that arts. 160 j) and 161 LSC offer tools for the adequate protection of the partners in that the statutes may establish the obligation to submit the contracts approved and signed by the board of directors for ratification by the general meeting or the board could issue instructions to the management body that would be specified in the establishment of a "remuneration policy", similar to those of listed companies, which would limit the discretion of the board in this matter.
In the face of this literal meaning of the rule, there were voices in favour of a different interpretation of article 249.3 LSC (sui generis contract for executive directors) in non-listed companies, and thus, on the basis of a criterion of transparency, it was said that the provision should not be interpreted in such a way that its application would lead to absolute opacity; that article 217 LSC requires that any remuneration for the exercise of administrative functions be legitimised in statutory provisions; and because the “maximum amount of annual remuneration” ex art. 217.3 LSC, must include remuneration through article 249.3 LSC.
The resolution of November 5, 2015 deals with this matter by opting for the literal interpretation of article 249 LSC, and indicates that the contract that must exist between the executive director and the company based on this article, and that must be previously approved by the board of directors with the requirements established by said precept, must be in accordance with the remuneration policy approved, where appropriate, by the general meeting, But the reference to that contract and that remuneration policy does not necessarily have to be included in the statutes..
Listed companies.
The problems mentioned have not been seen by listed companies since art. 61 ter LMV was introduced by the Sustainable Economy Law of 2011, since they were obliged to publish an Annual Remuneration Report that included, among others, the individual remunerations received by directors for the performance of executive functions and subsequently, Law 31/2014 also established two measures that recognise the board and the shareholders a role that the repealed art. 61 ter LMV did not recognise:
The first is the binding vote of the board on the director remuneration policy to which the directors' remuneration must necessarily conform.
The second is the provision of legal consequences in cases where the IAR is not approved by the board (articles 520 octodecies and novodecies LSC).
In Lleida on July 25, 2015
