Today, the Ministry of Commerce and Industry called on auditors assigned to audit listed public joint-stock companies and boards of directors of listed public joint-stock companies to adhere to the provisions of the circular issued by the Qatar Financial Markets Authority on June 22, regarding the method for determining the remuneration of members of the board of directors of listed companies. Qatar.
The Ministry stated, in a statement, that this step aims to enhance transparency and protect the rights of shareholders in the listed public shareholding companies, noting the need to adhere to the provisions of Article No. (119) of the Commercial Companies Law No. (11) of 2015 amended by Law No. (8) of 2021 and the provisions of Article (18) of the Code of Governance for Companies and Legal Entities Listed in the Main Market issued by the Authority’s Board of Directors Decision No. (5) of 2016, when reviewing and auditing the process of calculating the remuneration of members of the boards of directors of listed companies, which is conducted by auditors.
It stated that the remuneration of the members of the Board of Directors is determined according to two conditions; The first condition is the deduction of legal reserves and deductions stipulated in the provisions of the Commercial Companies Law, while the second condition stipulates that a profit of not less than 5 percent of the company’s paid-up capital must be distributed to shareholders, adding that the board of directors’ bonus is not distributed until after the first two conditions are fulfilled. The second, provided that their total does not exceed 5 percent of the net profit.
The ministry pointed out that the total amount of the board’s remuneration is deducted from the remainder of the net profit after deducting reserves and legal deductions, and deducting 5 percent of the company’s paid-up capital to shareholders, and not from the total profits before the aforementioned deduction, indicating that reference was made in the circular to An example showing how the board remuneration is calculated; If the value of the company’s capital is (800,000,000 riyals), and the value of the profits is (100,000,000 riyals), and the deduction rate is 10 percent of its value (10,000,000 riyals), then the 5 percent of the capital that must be distributed to the shareholders is (40,000,000 riyals), so the amount becomes The remainder of the profits after the aforementioned deduction is (50,000,000 riyals). Accordingly, 5 percent of the total board remuneration should not exceed (2,500,000 riyals), as 5 percent must be calculated from (50,000,000 riyals) and not from the value of the profits amounting to Its value is (100,000,000 riyals).
The Ministry also referred to the circular issued by the Qatar Financial Markets Authority, which dealt with the attendance allowances, salaries and wages received by the members of the Board of Directors, stressing in this regard that the circular stipulated that the remuneration includes all what the chairman or members receive in the form of an attendance allowance or a percentage of Profits or other considerations for his work on the Board of Directors, and then subject to the maximum limit specified in Article (119) of the Commercial Companies Law and Article (18) of the Corporate Governance System, and can be disbursed, provided that the final determination is made after calculating the net profits as follows indicated in the circular. If it is found that what has been spent exceeds the maximum limit, the chairman and members must return the excess.
In its statement, the Ministry of Commerce and Industry stressed the need to fill out the remuneration statement form and attach it with the minutes of the company's annual general assembly meeting upon handing it over to the Ministry's Corporate Affairs Department, noting that the form can be downloaded through its website.