Nejvyšší soud potvrdil možnost zpětně odměňovat členy volených orgánů

In its recent decision, the Supreme Court addressed an issue of considerable practical importance for corporations: whether a member of a statutory body may be granted remuneration for the performance of their office even though no executive service agreement approved by the general meeting had been concluded between the member and the company. The Court also considered whether such remuneration may be approved retrospectively for a period that has already elapsed.

In the case under review, the general meeting approved remuneration for a member of the board of directors for the performance of office during the period from 2012 to 2021. One of the shareholders challenged the validity of this decision, arguing primarily that the Business Corporations Act is based on the principle that the performance of office is unpaid where remuneration has not been agreed in an executive service agreement. In the shareholder’s view, it was therefore not possible to grant any remuneration retrospectively.

The appellate court agreed with this argument and concluded that the absence of an executive service agreement prevented remuneration  for serving as a member of the board of directors from being approved subsequently. The Supreme Court, however, rejected this conclusion as incorrect and emphasized that its previous case law has long supported a different interpretation.

According to the Supreme Court, it is true that where remuneration has not been properly agreed in an executive service agreement, the performance of office is in principle unpaid. However, this does not mean that remuneration cannot be awarded on another legal basis. The law permits benefits to be provided to a member of an elected body based on a decision of the body responsible for approving the executive service agreement, typically the general meeting.

The Supreme Court further reiterated that the general meeting may approve remuneration not only prospectively but also retrospectively for a period during which the office has already been performed. The decisive factor is that the remuneration must be approved by the general meeting, thereby preserving its oversight of the remuneration of members of the company’s elected bodies.

The decision therefore represents an important confirmation of existing case law and provides companies with greater legal certainty in situations where an executive service agreement was not concluded or approved in accordance with the law. Although a properly executed and approved executive service agreement remains the standard and recommended solution, its absence does not in itself prevent the general meeting from subsequently and validly granting remuneration to a member of a statutory body.

Authors:
Kateřina Suchanová
Matěj Šimpach