Director Roles, Contracts, and Compensation
Directors in Irish companies often hold diverse roles, including key executive functions. While the position of a director itself isn’t automatically salaried, directors can receive payment through service contracts or employment agreements if stipulated. Non-executive directors typically receive fees for their services, and reimbursement for expenses incurred is allowed under standard provisions.
Directors may have specific employment contracts that clarify their responsibilities and remuneration. Contracts exceeding five years need shareholder approval to prevent self-dealing. In cases where a director is dismissed from office, this doesn’t automatically equate to termination of employment, and directors may be entitled to claim for unfair dismissal.
For transparency, companies must disclose details of directors’ service contracts longer than three years. Approval from shareholders is also required for certain compensatory payments related to the director’s departure, particularly in connection with a takeover.
Directors are legally obliged to declare conflicts of interest in contracts. In single-member companies, any contract between the company and its sole director/member must be documented in writing and noted in board minutes to ensure transparency.