ACCA F4 - Corp and Business Law (ENG)

274 18: Company directors  Part F Management, administration and regulation of companies

Quoted companies are required to allow a vote by members on the directors' remuneration report. The

vote is purely advisory and does not mean the remuneration should change if the resolution is not passed.

A negative vote would be a strong signal to the directors that the members are unhappy with remuneration

levels.

Items not subject to audit

 Consideration by the directors (remuneration committee) of matters relating to directors'

remuneration

 Statement of company's policy on directors' remuneration

 Performance graph (share performance)

 Directors' service contracts (dates, unexpired length, compensation payable for early termination)

Items subject to audit

 Salary/fees payable to each director

 Bonuses paid/to be paid

 Expenses

 Compensation for loss of office paid

 Any benefits received

 Share options and long term incentive schemes – performance criteria and conditions

 Pensions

 Excess retirement benefits

 Compensation to past directors

 Sums paid to third parties in respect of a director's services

3.4 Inspection of directors' service agreements

A company must make available for inspection by members a copy or particulars of contracts of

employment between the company or a subsidiary with a director of the company. Such contracts must

cover all services that a director may provide, including services outside the role of a director, and those

made by a third party in respect of services that a director is contracted to perform.

Contracts must be retained for one year after expiry and must be available either at the registered office,

or any other location permitted by the Secretary of State.

Prescribed particulars of directors' emoluments must be given in the accounts and also particulars of any

compensation for loss of office and directors' pensions.

4 Vacation of office

A director may vacate office as director due to: resignation; not going for re-election; death; dissolution

of the company; removal; disqualification.

A director may leave office in the following ways.

 Resignation

 Not offering themselves for re-election when their term of office ends

 Death

 Dissolution of the company

 Being removed from office

 Being disqualified

A form should be filed with the Registrar whenever and however a director vacates office.

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