임원의 보수에 관한 연구

Abstract

Under common law, directors were not compensated for their work, but today statutes generally provide that directors can set their compensation. Compensation policy is generally established within the ordinary course of business. In that sense, compensation issues are the kind of decisions that should be protected by the business judgment rule and not be subject to direct judicial scrutiny. But compensation can also be a form of self-dealing where those who manage reward each other excessively, at the expense and exclusion of the shareholders. However, because compensation is a common business decision, even if it involves self-dealing, it differs from other interested director transaction which may not be in the usual course of business. Most publicly traded corporations have some independent directors with the intent of having the decision protected by the business judgment rule. Compensation may take different forms, salaries, bonuses, pensions and stock options. Generally, there is little judicial scrutiny of salary and bonuses although stock options have been subject to some review. In some cases, when the market has declined, directors have the repriced options, lowering the exercise price. The repricing alone would not constitute waste when the market price is declining, because there may be no added value to the option holder for the new lower priced options. Plaintiffs challenging the excessive compensation schemes try to have the courts apply a fairness test, while defendant argue for the business judgment rule or a waste standard. If a majority of the directors are voting compensation for themselves, then there is self-dealing with fairness as the standard and the burden of proof on the defendants. When there is an independent board or disinterested shareholder ratification of the self-dealing compensation, then courts must decide what standard applies. Generally the business judgment rule will apply when the disinterested directors approve and a waste test will apply when the shareholders approve. SEC adopted new disclosure guidelines for the express purpose of providing a clear presentation of senior executive compensation. SEC requires a line-graph plotting for five years of the relationship of executive compensation to overall corporate performance as embodied in a measure of cumulative total shareholder return, which itself is contrasted with an acceptable stock index. Article 388 of Korean Commercial Code provides “If the amount of compensation for directors has not been determined by the articles of incorporation, it shall be determined by the resolution at the general meeting of a shareholders.” In principle, the general meeting of a shareholders should determine the amount of compensation for the individual director. However, the right to determine the amount thereof is by convention delegated to the board of directors. For the protection of minority shareholders, the introduction of the disclosure system regarding the executive compensation under U.S. securities laws is highly recommended.