Repayment of the remuneration of members of bodies of corporations: claw-backs abroad and in the Czech republic
Abstract
Remuneration provided to persons in management positions of business corporations can greatly motivate these persons to perform duly their obligations. In certain cases, however, remuneration rules fulfill the function of a penalty, if there is violation of (fiduciary) duties.
The presentation focused on the ways in which it is possible to ask the body member of a corporation, or other persons in management positions, returning already provided bonuses and other benefits associated with the exercise of their functions. Obligation to return bonuses (ie.
Clawback rule) is increasingly becoming an integral part of the service agreements, respectively. similar contracts with managers of business corporations. In a number of foreign jurisdictions the clause on the return of bonuses are included in these contracts directly on an explicit legal obligation.
Czech Business Corporations Act contains governs that under specific conditions the body member can be required to repay all benefits he received in connection with the performance of his duties. The aim of this paper was to try to describe the use of clawback rule in selected foreign jurisdictions and to assess the possibilities of its application in the Czech republic.