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Director Fee Agreement

Director Fee Agreement Template for Indonesia

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Key Requirements PROMPT example:

Director Fee Agreement

"I need a Director Fee Agreement for a newly appointed Finance Director of our Jakarta-based fintech company, including provisions for both fixed compensation and performance-based bonuses, effective March 1, 2025."

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Document background
The Director Fee Agreement serves as a crucial document in Indonesian corporate governance, establishing the formal arrangement between a company and its director regarding compensation and benefits. This agreement is essential when appointing new directors or revising existing compensation arrangements, ensuring compliance with Law No. 40/2007 on Limited Liability Companies and related regulations. It typically follows appointment approval by shareholders and requires proper corporate authorizations, particularly for listed companies subject to OJK regulations. The agreement comprehensively covers all aspects of director remuneration, including basic fees, benefits, performance-linked compensation, and payment terms, while ensuring alignment with Indonesian tax regulations and corporate governance requirements.
Suggested Sections

1. Parties: Identification of the company and the director entering into the agreement

2. Background: Context of the appointment and basis for the fee agreement

3. Definitions: Key terms used throughout the agreement

4. Appointment and Term: Confirmation of director's appointment and duration of the agreement

5. Basic Fee: Structure and amount of the basic director's fee

6. Payment Terms: Timing and method of fee payments

7. Additional Benefits: Overview of additional benefits such as healthcare, insurance, and allowances

8. Performance Reviews: Process and timing for reviewing the director's fee

9. Tax Obligations: Responsibilities for tax payments and withholding

10. Confidentiality: Obligations regarding confidential information

11. Termination: Circumstances and process for termination of the agreement

12. Governing Law: Specification of Indonesian law as governing law

13. Dispute Resolution: Process for resolving any disputes regarding the fee agreement

Optional Sections

1. Performance Bonuses: Details of any performance-based compensation, used when the company implements a variable pay structure

2. Share Options: Terms of any share option schemes, included for companies offering equity-based compensation

3. International Service: Special provisions for directors serving multiple jurisdictions, used for multinational companies

4. Clawback Provisions: Terms for recovering payments in specific circumstances, typically used in financial institutions or listed companies

5. Non-Competition: Restrictions on competing activities, included when protecting company interests is crucial

6. Currency Provisions: Specifications for payment in foreign currency, used when fees are paid in non-Indonesian Rupiah

Suggested Schedules

1. Schedule A - Fee Structure: Detailed breakdown of all compensation components

2. Schedule B - Benefits Package: Comprehensive list and details of all benefits provided

3. Schedule C - Performance Metrics: Criteria for performance-based compensation if applicable

4. Schedule D - Expense Policy: Guidelines for reimbursable expenses and claim procedures

5. Appendix 1 - Board Resolution: Copy of board resolution approving the fee arrangement

6. Appendix 2 - Tax Treatment Summary: Summary of applicable tax regulations and treatments

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Financial Services

Manufacturing

Technology

Retail

Mining

Energy

Healthcare

Real Estate

Telecommunications

Consumer Goods

Professional Services

Transportation

Agriculture

Construction

Relevant Teams

Board of Directors

Legal

Human Resources

Finance

Company Secretariat

Compliance

Corporate Governance

Compensation & Benefits

Internal Audit

Relevant Roles

Board Director

Managing Director

Executive Director

Independent Director

Finance Director

Operations Director

Commercial Director

Non-Executive Director

Corporate Secretary

Head of Legal

Chief Executive Officer

Chief Financial Officer

Head of Human Resources

Compliance Officer

Industries
Law No. 40/2007 on Limited Liability Companies: The main corporate law in Indonesia that governs company structures, management roles, and responsibilities, including provisions on director appointments and remuneration determination processes
Law No. 13/2003 on Employment: Though directors are not typically considered employees, this law provides relevant context for employment relationships and benefits that might be applicable to director arrangements
Income Tax Law No. 36/2008: Governs the taxation of director fees and other forms of remuneration, including the applicable tax rates and reporting requirements
OJK Regulation No. 34/POJK.04/2014: For publicly listed companies, this regulation sets requirements for remuneration and nomination committees and transparency in determining director compensation
Government Regulation No. 78/2015: Provides guidelines on remuneration including components that can be included in compensation packages
Minister of Manpower Regulation No. 1/2017: Covers wage structure and scales which may be relevant for benchmarking director compensation
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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