Directors' remuneration

Entitlement to remuneration

When considering a director's entitlement to remuneration, it is important to note the distinction between:

1. •

   a director who is not also an employee of the company

2. •

   a director who is employed under a service contract with the company entitling the director to a salary and/or other remuneration

Directors are not automatically entitled under the Companies Act 2006 (CA 2006) or otherwise to remuneration, or to reimbursement of expenses incurred, by virtue of their office as directors of a company. However, a company's articles of association will usually provide that the directors are entitled to such remuneration as the directors may determine:

1. •

   for their services to the company as directors

2. •

   for any other service which they undertake for the company

Without such an express power in the articles for the directors to be paid for their services, it will not be within the company's powers