Check competence, voting rights, appropriateness and documentation before the resolution.
Check competence, voting rights, appropriateness and documentation before the resolution.
Managing director remuneration among shareholders: resolution and documentation
Managing director remuneration in an Austrian GmbH: structure resolution path, appropriateness and documentation.
The issue is who decides on remuneration, bonus or adjustment, how conflicts of interest become visible and which documentation prevents later allegations.
Managing director remuneration among shareholders: resolution and documentation
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Which remuneration issue is open?
All paths at a glance
Overview of all answers.
Review agreement, resolutions, payments and conflicts of interest together.
Review agreement, resolutions, payments and conflicts of interest together.
When remuneration becomes a company law issue
The issue becomes sensitive when the managing director is also a shareholder, when shareholders hold different stakes or when a bonus rule is applied without a clear resolution basis.
Further sensitive points are back payments for prior periods, recurring increases without a resolution, special bonuses in a loss year and benefits in kind or perks alongside the fixed salary. Not every remuneration issue belongs in the articles. Still, the articles should show which body decides, which majority applies and how conflicts of interest are handled.
Separate resolution path and voting rights clearly
Before a remuneration decision, clarify whether a shareholder resolution, service agreement, rules of procedure or side agreement governs the matter. Voting rights, abstention and conflicts should not be improvised once a dispute exists.
Section 39 paragraph 4 GmbHG generally excludes a shareholder from voting on a legal transaction between that shareholder and the company. This regularly includes agreeing or changing the remuneration of a shareholder-managing director and should be addressed expressly in the minutes.
Relevant bases include GmbHG, ABGB, UGB and capital maintenance considerations. Tax and social security consequences should be coordinated separately with tax advisers.
Appropriateness and documentation as protection
Appropriateness does not mean stating a general number. Function, scope, company situation, comparability, resolution basis and ongoing documentation matter.
Comparability can usually be shown through role and P&L responsibility, revenue and headcount, industry and full-time equivalent. Bonus and success components should include target metrics, calculation formula, reduction triggers and payout date in a traceable way.
The checklist on voting rights and majorities helps prepare the resolution. For the full contract, review articles of association remains the right entry point.
Documents for remuneration review
Useful documents are articles, managing director agreement, previous resolutions, payment overview, bonus rules, shareholder structure and side agreements. For benefits in kind, the company car rule, insurance policies and any pension commitment should be provided in full.
The review should show who may decide, whether a conflict is visible, which documents are missing and how a future resolution can be documented reliably. Where a retroactive effect or back payment is intended, capital maintenance should also be checked.
FAQ
May a shareholder-managing director vote on their remuneration?
That must be checked against the specific resolution path, articles and conflict of interest. General answers are risky.
Must remuneration be stated in the articles?
Not necessarily as an amount. But competence and resolution path should be clear.
Which documents are needed first?
Articles, managing director agreement, resolutions, payment overview, bonus rules and shareholder structure.
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Review and structure GmbH articles with Brandauer Rechtsanwälte in Austria.
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