Remuneration of whole-time director

Meetings 1376 views 6 replies

Parag Bhatt

Student

41 Points Joined July 2010

Dear All,

Please find below my query:

The appointment term of a Whole-time Director ends on 31-Dec-11. He is to be reappointed w.e.f. 01-Jan-12 for a period of 3 years by the Board, subject to approval of the shareholders at the Annual General Meeting to be held in July next year. The Whole-time Director is paid a revised salary w.e.f. 01-Jan-12

In the Annual General Meeting of the Company, if the shareholders doesnt not approve the re-appointment of the Whole-time Director in the said AGM, what would be the effect on salary paid so far to the WTD w.e.f. 01-Jan-12 ?

Should the WTD refund back the salary received w.e.f. 01-Jan-12 to the Company or the Company needs to take approval of the Central Government to waive off such remuneration ?

I would be thankful to you all, if I get immediate reply to my query.

Thanking you.

Parag Bhatt

Replies (6)

RG - A Helping Hand

Company Secretary

13877 Points Joined May 2011

Sir,

As per my understanding the WTD should refund back the salary received if refused by shareholders. Further CG can’t help it and cannot approve the same without the approval of shareholders.

vikas Agarwal

Article & Ca Final Student

125 Points Joined May 2011

I Agree With Richank

Rakesh Dhanuka

Company Secretary

478 Points Joined January 2010

WTD has just to vacate the office. He don't have to refund the salary as he has served to the company for 6months (Jan - June)

manjula

Articles Asst

641 Points Joined May 2007

yes , i agree with Rakesh, he should not refund salary

ars

445 Points Joined February 2009

As a good practice - the co. should held g.m. prior to the expiry of the terms of the services of such dir.

in your case if u hold g.m. before 31/12/11 and assuming the appointment fails i.e. members disapprove his appointment then the question of refund of salary does not arise.

more importantly - what would happen to the decisions he would take, post dec'11 and prior to the g.m., for and on behlaf of the co. i.e. during the period his appointment is in question ? - for all practical purpose he is not the director on those days. hence, it is not the question of remuneration only.

Parag Bhatt

Student

41 Points Joined July 2010

Thanks Friends for your kind gesture but I want some specific and law based remedy to my problem. Is there any case law or any example you can give me on above matter?

Thanks again.