UPCOMING CHALLENGES ON REGULATING REMUNERATION OF THE DIRECTORS AND IMPLEMENTING REMUNERATION POLICIES

Sa？etak The European Parliament adopted the Directive 2017/828 as regards the encouragement of long-term shareholder engagement that grants shareholders to hold the right to vote on the remuneration policy for employees and directors. Following the collapse of large companies in the USA and common agency problem, the intent of regulators on capital markets was to ensure preconditions for stable companies, so remuneration policies were prescribed by the recommendations and through corporate governance mechanisms, such as is say on pay. In order to align interests of the companies and their directors, remuneration policy was recognized as one of the key instruments introduced by the EU legislator for financial institutions, primarily investment funds and banks. The implementation of the Directive into national legislation is mandatory, so for the first time the regulator gives shareholders the right to decide on the remuneration of directors, it gives them the option of setting the framework within the pay of directors is to be held and proposing public disclosure of remuneration policy. One of the major issues that will be imposed by the new Directive will be how and to what extent the decision on the remuneration of directors, will be left to the shareholders to vote at the general meeting. The authors in this paper analyze new system on remuneration policies, opportunities and obstacles that companies may face, as well as the challenges imposed to directors, in the implementation of the Directive in national legislation and practice