CHILE Law and Practice Contributed by: Franco Acchiardo, Francisca Castro, Hugo Prieto and Manuel Diumenjo, Clyde & Co Chile
4.10 Approvals and Restrictions Concerning Payments to Directors/ Officers The remuneration and fees payable to direc - tors must be approved by the shareholders at the annual ordinary shareholders’ meeting. This includes any fixed fees, attendance fees, or other benefits granted to directors. In contrast, the remuneration and benefits for senior execu - tives and officers (such as the CEO and other top management) are typically determined and approved by the board of directors. Compensation policies must adhere to appli - cable corporate governance best practices and align with market standards. Directors and senior executives are prohibited from approv - ing their own compensation to avoid conflicts of interest. Any remuneration or benefits that create conflicts or are inconsistent with approved poli - cies may be deemed unlawful. Directors who approve unlawful or unauthor - ised compensation may be subject to personal liability, including fines and potential removal from office. The CMF oversees compliance with these rules and can impose administrative sanc - tions such as fines, penalties, or other corrective measures on both individuals and the company. Failure to comply with remuneration approval requirements may also expose the company to reputational damage and shareholder disputes. 4.11 Disclosure of Payments to Directors/Officers Remuneration of directors must be approved by the shareholders in the annual ordinary share- holders’ meeting. Although shareholders’ meetings are private, in publicly traded corporations, they must be informed to the CMF and may be subject to dis -
closure obligations, making them much more susceptible to public knowledge.
5. Shareholders 5.1 Relationship Between Companies and Shareholders The relationship between a company and its shareholders is primarily governed by the LSA and, for publicly traded companies, by the LMV and related regulations issued by the CMF. Shareholders are the owners of the company’s equity and exercise their rights mainly through participation in shareholders’ meetings. They are entitled to: • vote on key matters such as the election of directors, approval of financial statements, profit distribution, mergers, and amendments to the by-laws; • receive dividends, if declared; and • access certain corporate information, includ - ing meeting minutes and audited financial statements. Every corporation must maintain a shareholders’ registry, which records the ownership of shares and related changes. This registry is private and managed by the company or a designated administrator (eg, a stock registry agency). In the case of publicly traded companies, the CMF requires disclosure of: • the identity of controlling or major sharehold - ers (typically defined as those owning 10% or more of the shares or voting rights); • certain changes in ownership thresholds.
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