Directors remuneration Assignment Example | Topics and Well Written Essays - 1750 words

Directors remuneration - Assignment Example But, before that director’s role must be defined. Section 741 of the companies Act (CA) 1985 defines the term director: any person occupying the position of director, by whatever name that position occupying person is called (Corporate and business law (UK), exam kit, 2007/08). Primarily, this definition does not much focus on the definition of the director rather it emphasizes on the function the person performs; this stipulates that whether he is a director or not. Remuneration may include the following benefits received by directors: gains on the exercise of share options; benefits either received or receivable under long-term incentive schemes; payments received for the loss of office (as defined in the section 215); benefits and contributions receivable for the purpose of providing benefits , with respect to the past services of person as director or in any other capacity while director; (legislation.gov.uk, web); consideration paid to or consideration receivable by third parties for making available the services of a person as director or in any other capacity while director. The above given elements amounts to remuneration and benefits received by a director. ... e auditable part of the directors’ remuneration report, How much of information relating to the directors’ remuneration is to be included in the report. Additionally, it is the duty of any director of a company and any other person who is or has at any time in the preceding five years been a director of the company, to bring into the notice of the company of such matters either relating to himself as may be significant for the purposes of regulations under this section. If a person in the above mentioned capacity makes default in complying with these regulatory requirements commits an offence; as a result, he is liable and accountable on summary conviction; as a result, he would be fined for that offence according to the level 3 on the standard scale. Approval and signing of directors’ remuneration report The board of directors is authorised to approve the directors’ remuneration report and this report must be signed on behalf of the board by a director or the secretary of the company (under section 422 (1), chapter 4, Annual accounts, Companies Act 2006(c.46)). In most of the quoted companies, it is the responsibility of the company secretary to sign the directors’ remuneration report. In case, the secretary of the company is not available, any director may be authorised to sign on behalf of the board. If a directors’ remuneration report is approved but it is unable to satisfy the requirements of the Act, every directors of the company commits an offence who knew that the report did not qualify the requirements, or who failed to take appropriate steps to ensure the compliance with the Act requirements. Any person found guilty of an offence under this section will be responsible and may face a legal action provided in the company’s law. Quoted companies: