Directors' service contracts

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This subtopic covers the provisions of the Companies Act 2006 (CA 2006) relating to:

  1. •

    approval of a provision in a service contract under which the guaranteed term of a director’s employment is, or may be, longer than two years, and

  2. •

    retention, copying and inspection of directors’ service contracts

This subtopic also considers directors' remuneration pursuant to CA 2006 and a company's articles of association.

An additional layer of regulation in relation to directors' service contracts and remuneration is imposed on companies with a listing of equity shares in the equity shares (commercial companies) category on the Official List of the London Stock Exchange (a listed company) by the UK Listing Rules (UKLR), the UK Corporate Governance (UKCG) Code and the best practice guidelines of institutional shareholder bodies. These requirements are also considered in this subtopic.

The term ‘director’, for the purpose of these statutory provisions, includes any person occupying the position of director, whatever their title, and also a shadow director.

Approval of guaranteed term of employment that is, or may be, longer than two years

CA 2006 provides that

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