Ondernemingsrecht en corporate governance

In our Newsletter of 31 May 2017, we informed you about the new European Shareholders’ Rights Directive (Directive 2017/828 as regards the encouragement of long-term shareholder engagement, sometimes referred to as ‘SRD II’, hereafter the “Directive”).  Among other things, the Directive contains provisions governing executive remuneration in EU listed companies, which are often described as the shareholder ‘say on pay’ rules. 

The Directive was to be implemented in Belgium and other EU Member States by 10 June 2019 at the latest.  Belgium missed that deadline. The Michel I government gave priority to the adoption of the Belgian Code on Companies and Associations.  Since then, we have gone through a period of political instability compounded by the corona crisis, resulting in delays. 

The Belgian law implementing the Directive (hereafter the “Law”) was finally adopted on 28 April 2020 and published in the Belgian Official Gazette of 6 May 2020.

For Belgian listed companies the main changes that the Law will bring about are:

  • the requirement that the shareholders vote in advance on the remuneration  policy -- until now, they only voted on the remuneration report, established after the facts;  and
  • the publication of figures comparing executive pay, company performance and average employee pay, as well as the ratio between the highest director pay (presumably CEO pay) and the lowest worker remuneration -- these are novelties in Belgium.
  • until now, individual publication of the remuneration was only required for the CEO while for the other management or executive committee members only the aggregate figures were published;  individual publication for other management members will henceforth be required only in companies that adopt the dual management model with a management council (directieraad / conseil de direction);  for informal management or executive committees, aggregate figures will still suffice.

This newsletter reviews the executive remuneration provisions in the Law and in the 2020 Belgian Corporate Governance Code. 

We hope you enjoy the read!

Shareholders Rights Directive