Day 5 November 2019 The President signed the Act amending the Act on Public Offering and Conditions for the Introduction of Financial Instruments to Organized Trading System and on Public Companies and certain other Acts.
After 14 the day-old vacatio legis from the date of publication of the amendment, i.e. on 30 November 2019 The bill will enter into force and with it a number of new regulations and obligations.
The provisions have been amended as a result of the entry into force of European Union legislation on the publication of prospectuses in relation to securities issuance and the encouragement of shareholders of public companies to engage in the long-term.
Novum is, among other things, an obligation for companies established in the territory of the Republic of Poland to accept, but whose share is admitted to the regulated market publicly, remuneration policy and annual remuneration reports.
New obligations to adopt remuneration policies or remuneration reports certainly do not surprise public companies, and time will show to what extent the obligation to apply these good practices to the legal order will contribute to the positive corporate governance of public companies
Remuneration policy, i.e. the instrument for implementing business strategy and long-term interests
The adoption of remuneration policy will be the responsibility of the general meeting of the company. The remuneration policy solutions should contribute to the implementation of the business strategy, long-term interests and stability of the company and cover the remuneration of board members and supervisory board.
Companies obliged to adopt remuneration policies will be able to pay salaries to members of the board of directors and supervisory board, only in accordance with remuneration policies.
As already mentioned, the remuneration policy will be adopted by the general meeting of the company by means of a resolution which should be adopted by the general meeting of the company at least every four years. A significant change in remuneration policy requires a re-acceptance of it in the form of a resolution of the General Meeting.
The remuneration policy adopted and the resolution on remuneration policy, together with the date of its adoption and the results of the vote, should be included on the company's website.
On the other hand, if the company has not yet adopted a remuneration policy, it can pay remuneration in accordance with its current practice, but should adopt a revised remuneration policy at the next general meeting. The late ones will have time to adopt the remuneration policy, at the latest by 30 June 2020
Remuneration report, an annual review of remuneration policy
The report on remuneration will be the responsibility of the supervisory board of the company. Each year, it aims to provide a comprehensive overview of the remuneration, including all benefits, whatever their form, received by individual members of the board of directors and supervisory board or due to individual members of the board of directors and supervisory board in the last financial year, in accordance with remuneration policy.
The report drawn up by the Supervisory Board shall be placed on its website and made available free of charge at least 10 years after the end of the general meeting, which adopted a resolution giving an opinion on the remuneration report or discussed the remuneration report.
It is also worth noting that the Amending Act provides for mechanisms for checking the remuneration reports drawn up by the Supervisory Board. These include, among other things, the obligation for the general meeting of the company to adopt resolutions giving opinions on the report on remuneration or the obligation to report on the remuneration of the statutory auditor to the extent indicated in the new regulation.
However, as regards the opinions, it should be noted that such a resolution is purely advisory and that the legislator does not indicate any other consequences of the negative assessment expressed by the general meeting of shareholders in relation to the remuneration report drawn up by the supervisory board.
The market will finally apply good practices
The adoption of a remuneration policy setting out the principles of remuneration for members of the management and supervisory bodies of public companies has so far been treated as good market practice, which was reflected, among other things, by including in the collection of Good Practices of companies listed on the Warsaw Stock Exchange relating to them.
The new obligations concerning the adoption of remuneration policies or remuneration reports certainly do not surprise public companies, and time will show to what extent the incorporation of the obligation to apply the good practices in question into the legal order will contribute to the positive corporate governance of public companies.
Author: Michał Skwarek - a solicitor's application in the legal department Russell Bedford Poland. Graduated from the Faculty of Law and Administration of the University of Warsaw.