The remuneration of social managers is a main issue within the corporate life.
The ruling of the Supreme Court on February 26 on the issue of the regulation of the remuneration of company managers generated enormous uncertainty in Spanish commercial ruling, as it meant a radical change in the interpretation that, in general, it had been doing on this regulation after its reform by Law 31/2014.
When the 2014 reform introduced in article 217 LSC, the mention of the remuneration of the directors “in their capacity as such” seemed to try to distinguish between the remuneration as mere directors, and that of the executive directors that would be reflected only in the contract regulated now in article 249 LSC.
The aforementioned judgment considers that both precepts are not alternative but cumulative; that means, it considers that Articles 217 to 219 LSC are applicable to all administrators, without distinctions, and that Article 249 LSC, only, contains the specialties specifically applicable to directors, delegates or executives, and that consequently all remuneration to the administrators must have in all cases statutory support and must obtain the prior approval of the General Meeting.
On October 31, 2018, the Head Office of Registries and Notaries issued a resolution in reference to the ruling of the Supreme Court on the compensation of administrators in order to clarify it. The said Head Office firstly, tried to de-escalation, recognizing that there is still no jurisprudence, because it cannot be considered as such by a single sentence, and adopted a flexible position regarding the positioning of the TS when considering that the general interpretation that the sentence contradicts is the correct one, by sharing that articles 217 and 249 LSC establish alternative and non-cumulative systems, but also remembers that the really important thing to keep in mind is the guarantee of transparency that the regulations have to protect, in order to provide an adequate information on the remuneration of administrators to the shareholders, and appeals to the legislator to carry out the relevant legislative amendments to avoid divergence in the interpretation of the law text.
As long as no new judgments of the TS appear in line with this one, we can continue accepting the separation of the remuneration of the administrators without incurring in unlawfulness situations.
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Marc Baró – Lawyer