TÜRKIYE Law and Practice Contributed by: Selim Keki, Çisem Altundemir and Erkin Tuzcular, Balcıoğlu Selçuk Eymirlioğlu Ardıyok Keki Attorney Partnership
4.10 Approvals and Restrictions Concerning Payments to Directors/ Officers Directors and managers of a JSC and an LLC may be paid a special remuneration (called hon - orarium) if this is approved by a general assem - bly resolution. This is a non-delegable power of the general assembly. Other financial benefits (dividend shares) paid to directors will be sub - ject to the same restriction, but if the relevant person is employed at the company, salaries so received will not have to be approved by the general assembly. Without a valid general assembly resolution, the honorarium payments to the board members will not be lawful and could be reclaimed by the company. Also, the shareholders and creditors could file a damages claim. Finally, there is a risk of such payments being qualified as salaries by social security institutions, which could treat this as an evasion of social security payment obliga - tions. Listed companies have a remuneration policy, prepared by the remuneration committee and adopted by the board of directors of the public company. On the basis of this policy, the remu - neration committee and the board of directors make suggestions for the remuneration of the board members to the general assembly. The general assembly ultimately resolves on the remuneration of the board members in line with the remuneration policy. 4.11 Disclosure of Payments to Directors/Officers For non-public companies, remuneration policy does not need to be announced or disclosed, as the authorising general assembly resolution would not be subject to registration with the trade registry.
For some breaches of law, the administrative fines can be enforced by the local authority and even imprisonment is threatened (although the latter is not generally enforced). 4.9 Other Bases for Claims/Enforcement Against Directors/Officers The legal representatives of a JSC (including the directors and other officers with the power to manage and represent the company) may be held personally liable if a JSC does not or cannot pay its tax debts. In companies that have issued capital markets instruments, the board members may also be held liable for statements provided under the prospectus or issuance certificate and the true and accurate reporting of financial information. Any liability by a director (or manager) requires a faulty action leading to damages. Therefore, if damages are not caused by the fault of the con - cerned director or manager, such person cannot be held liable. If a management function is partially or com - pletely delegated, the board will be released from liability to the extent of the delegated func - tion. However, directors will be held liable if they have not selected or fail to monitor the relevant person with due care. The liability of a present or former director or officer can be terminated either by an explicit release by shareholders’ decision or through shareholder approval of the company’s annual report and financial statements.
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