In order to understand the laws with respect to Directors remuneration in Australia and whether the said law are adequate, effective and efficient to protect the interest of the Shareholders, it is important to understand as to who is a Director.
The Corporation Act, 2001 is the governing law in Australia which guides the functioning of a Company. Various provisions are incorporated by the Corporation Act, 2001 with respect to its employees, officers, directors etc. There is no specific definition that can be attributed to a Director. However, as per section 9 of the Corporation Act, 2001, a director is said to be a person who is selected to the position of a Director. A person does not required to attain any kind of degree or specific educational qualification to be appointed as a Director. A person can become a Director of a Company, either Public or private company, as when he is appointed to such a position. However, as per section 201B of the Corporation Act, 2001 a person must be major,that is, he must have attained the age of18 years to appoint to the post of a Director.The Corporation Act, 2001 has enacted several provisions with respect to a director, such as, when a Director can be disqualified, whether a Director can become the shareholder of the Company, duties and responsibilities of a Director, remuneration of a Director etc.
Thus, after understanding as to who is a Director, the next important provision which needs analysis is what are the provisions which are enacted by the Corporation Act, 2001 with respect to Directors remuneration?
But what is Remuneration?
Section 9 of the Corporation Act, 2001 submits that remuneration is a benefit which is either given to officer or employee of the company. Further, when it is received by the Director, the benefit is considered to be the remuneration for a director2.
The Corporation Act, 2001 has enacted several provisions with respect to remuneration of a Director. Part 2D.3, Division 2 of the Corporation Act, 2001 deals with remuneration of a Director3.