New Legislation. Change in the remuneration of the Directors

On February 26, 2018 the Civil Section of the Spanish Supreme Court in its resolution number 98 of the current year, has modified the majority criterion that the Spanish corporate doctrine had been maintaining so far, regarding the remuneration of directors and the interpretation given to Articles 217 and 249 of the Ley de Sociedades de Capital (“Corporate Enterprises Act”).

At the beginning and since the amendment of the mentioned law, at the end of 2014, the common principle of the doctrine was sustained over the existence of two different kinds of remuneration:

(i) “Directors in such condition”, which was governed by the Bylaws provisions and the resolutions of the General Meeting of Shareholders that had to agree the maximum amount of the annual remuneration for  all the directors of the  company.

(ii) “Executive Directors”, which was regulated by the formal agreement to be signed between the  executive director and the company, which was to be approved by the Board of directors.

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