AmCham Macedonia Summer 2016 (issue 50) - Page 14

ADVOCACY Summer 2016 / Issue 50 Overexposed: Excessive Board Member Disclosure Rules Compensation details are generally not public information. Many companies consider management compensation and benefits packages as a trade secret, meaning their disclosure in another company’s annual report (as required by article 384) could result in negative repercussions for both the individual and the company/group. O n May 28th, 2015, Macedonian Parliament adopted a number of amendments to the Company Law. An amendment made to Article 384 requires that the annual reports of public companies in Macedonia include details of the global employment- and/or Board service-related earnings (salary, other remuneration, bonuses, insurance and other rights) of each member of their executive & non-executive boards, management boards and supervisory boards. While government efforts to further enhance the protection of minority investors are commendable, the amendments made to Article 384 far exceed what is necessary and reasonable to achieve this goal. In fact, this new requirement could negatively impact internationalized companies working in the country as it seems to lack legal legitimacy and differs from global best practices. AmCham communicated its position based on feedback from over 15 organizations to the Ministry of Economy (MoE) and others in May, including the following arguments: 14 AMCHAM MAGAZINE The EU Shareholder Rights Directive does not require the disclosure of global compensation details, nor are we aware of another country in Europe that does. The obligation to release the earnings from other companies may discourage foreign experts from serving on the managing bodies of companies in Macedonia, thus reducing the country’s appeal as an FDI destination. Information provided by foreign, non-Executive Board members on any earnings outside the company cannot be verified by company authorities or shareholders. Yet, article 384 requires Executive Board members and shareholders to sign and accept the validity of these data, as with all contents of the annual report. There is no evidence that measure increased the amount of useful information available to minority investors. The proponents of the amendments stated that “the changes were made in line with Doing Business 2015 report”, however that report doesn’t recommend such provisions. Moreover, the Doing Business 2016 report, doesn’t mention this change as a positive development in the Company Law.1 On June 21st 2016, AmCham received MoE’s response and a few weeks later, the Constitutional Court decided not to review Article 384 (in response to an initiative independent of AmCham)2. The MoE response to AmCham’s position and the ۜ]][ۘ[\[[\H\X[HY[X[ H^H\[Y[\H]\Y[X\&H]XH\[]YHHYX\\HX]\H\[Y\[\H[]]H\Y[X\]Z[[[Y\\Y\’[]YX[][][HZ\ؘ[\[][ۈ]Z[[[\H\HۈH\ŒN\[Y\\]Z\H\\Hو[ܛX][ۈۈ]\\Y[X\\HY[X\وX[Y[Y[X\\[\\[Y\\[\[ܛX][ۈۈZ\[X\H[\[ [ܝ[][KH\\[Y[\XH۝YX\[H]\XH  XX]\]XX[\Y\[Y\]\X\ۛ[H[[[X]\X[][H]Y]Y]YY][وZ\\Z\\[XY\ˈ[\ܙ]\[\XH[Z]H\X][ۈوH[X[\ܝ\Z\ˈHXۙ\[Y[Y[\[YHH\[وH[[[XH\HۈXXYۚX[\\Z\[[H[X[HY]]H[\XوXH[ [[KBN[Y\]YH[]][ۜ\]Z\H\Y[X\\HZ\ؘ[[\K\[][ۈ]Z[˂Z]\H[H܈Hۜ]][ۘ[\[[ۜ]Y\[\Y[X\&Hؘ[\[][ۈ]Z[H[\[XX\HY][X]K\X]B[X\\H\وX[\Z\H[XY[[\\Y\H[X[ۜˈ[\Y]\]Z\[\Y[X\\HH^\[Hو[[\[ \\XH[ ܈ۜ[[[][ۜ\]\ܙ[^][ۜ\YXY[ B[\[\ M\ܝ H˙[؝\[\˛ܙܙYܛ\ݙ\Y]Xۛ^KXXYۚXKY\ۜ]][ۘ[\X\[ۈ H˝\][Y ZZ[PQ ق