FRANCE Law and Practice Contributed by: Jean-Christophe Devouge and Kaïs Boussadia, Aurès
• if the compensation policy is rejected, the previ - ously approved principles and criteria shall con - tinue to apply or, in the absence of any previously approved policy, the compensation scheme shall be determined in accordance with the compensa - tion attributed for the previous financial year or, if none, in accordance with existing practice within the company; and • if the compensation paid – or payable – to the directors and/or officers is rejected, the relevant officer shall be deprived of any variable and excep - tional compensation due for the relevant fiscal year. Compensation schemes for officers of listed compa - nies are also subject to various rules and recommen - dations, including corporate governance codes (with, for instance, increasing recommendation to consider ESG criteria for variable compensation). SAS In an SAS, the conditions for the compensation of the chair and members of the board (if any) are set in the by-laws. SARL The compensation of the managing directors of a SARL is approved by the shareholders. Disclosure of Payments to Directors/Officers Listed companies must disclose any such compensa - tion in a complete and transparent manner in their Uni - versal Registration Document. This disclosure must provide the total compensation – fixed, variable and exceptional – and benefits of any kind attributed or paid to all corporate officers in the last year.
In an SAS, the by-laws are even more significant since the relationship between the company and its share - holders mainly relies on them, as the SAS corporate form is little regulated by law provisions. Public disclosure of shareholder information varies depending on the type of company. While SARLs are required to disclose shareholder allocations in their by-laws, which can be accessed through public plat - forms, sociétés par actions – such as SAS and SA – do not have a public register of shareholders. Instead, share ownership is recorded internally in share trans - fer registries maintained by the company. However, the situation differs significantly for listed companies. Shareholders exceeding certain thresholds must dis - close their holdings to both the company and the AMF, which then makes this information publicly available. As a general principle, shareholders are not meant to be in charge of the day-to-day management of the company, which is delegated to the corporate offic - ers. Nonetheless, shareholders are entitled to have an important role in the making of certain decisions – ie, all matters attributed to the general meeting by law and the by-laws., such as the approval of the annual accounts, the appointment and removal of corporate officers and statutory auditors, the amendment of the by-laws or the dissolution of the company. French law now provides a reinforced procedural remedy for shareholders who seek to challenge the agenda of the general meetings. Shareholders whose request to add an item or draft resolution to the agen - da of a general meeting is refused may now bring an expedited claim before the Commercial Court ( pro- cédure accélérée au fond ), thanks to the Attractivité Act. This mechanism strengthens minority sharehold - ers’ rights by enabling a ruling on the merits within a timeframe compatible with the holding of the disputed meeting. 4.2 Role of Shareholders Shareholders’ Involvement Besides this “typical” involvement, shareholders now play a more important role as they are increasingly solicited on the management of the company’s activ - ity and administration. For example, shareholders are now consulted on the remuneration of executives
4. Shareholders 4.1 Companies and Shareholders
The company and its shareholders are legally bound by the by-laws, which constitute the company’s main internal regulation. As far as shareholders are con - cerned, this set of rules – mainly driven by applicable laws of the French Commercial Code – states their specific rights within the company, such as their right to vote, their right to receive dividends or their right to information about business and management matters.
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