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Director Fee Agreement

Director Fee Agreement Template for Malaysia

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Key Requirements PROMPT example:

Director Fee Agreement

"I need a Director Fee Agreement for our newly appointed independent director of our listed technology company, including provisions for both board and committee attendance fees, share-based compensation, and D&O insurance, with the appointment starting March 1, 2025."

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Document background
The Director Fee Agreement is a critical document used to formalize the compensation arrangement between a company and its directors in Malaysia. This agreement is essential for both listed and private companies to ensure compliance with the Companies Act 2016 and Malaysian corporate governance requirements. It should be implemented upon the appointment of new directors or when updating existing director compensation arrangements. The agreement typically includes comprehensive details about fee structures, payment schedules, additional benefits, and meeting attendance fees, while ensuring alignment with Malaysian tax regulations and corporate governance best practices. It serves as a key document for corporate compliance and transparency in director remuneration.
Suggested Sections

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

2. Background: Context of the appointment and purpose of the agreement

3. Definitions: Definitions of key terms used throughout the agreement

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

5. Director's Duties and Responsibilities: Overview of core duties as per Companies Act 2016 and company requirements

6. Fee Structure: Details of the basic director's fee and payment terms

7. Meeting Attendance Fees: Specification of fees payable for board and committee meetings

8. Payment Terms and Schedule: Timing and method of fee payments

9. Tax Obligations: Treatment of tax withholding and reporting requirements

10. Expenses: Policy on reimbursement of reasonable expenses

11. Compliance with Laws: Commitment to comply with relevant Malaysian laws and regulations

12. Termination: Conditions and process for termination of the agreement

13. General Provisions: Standard clauses including governing law, notices, and amendments

Optional Sections

1. Committee Appointments: Additional terms for service on board committees - include when director serves on specific committees

2. Additional Benefits: Details of any additional benefits like insurance or allowances - include when offering benefits beyond basic fees

3. Share-Based Compensation: Terms of any share options or equity-based compensation - include for listed companies offering equity compensation

4. Confidentiality: Detailed confidentiality obligations - include for companies with sensitive information or listed companies

5. Non-Competition: Restrictions on competing activities - include when director has industry connections

6. Insurance and Indemnification: Details of D&O insurance and indemnification - include for higher-risk industries or listed companies

Suggested Schedules

1. Schedule 1: Fee Structure: Detailed breakdown of all fees including basic fee, meeting fees, and any additional allowances

2. Schedule 2: Duties and Responsibilities: Comprehensive list of specific duties and responsibilities

3. Schedule 3: Expense Policy: Detailed policy on claimable expenses and claiming procedures

4. Schedule 4: Committee Assignments: List of committee appointments and associated additional fees

5. Appendix A: Board Meeting Schedule: Tentative schedule of board meetings for fee calculation purposes

6. Appendix B: Company Policies: Relevant company policies affecting director duties and compensation

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

Healthcare

Real Estate

Energy

Telecommunications

Consumer Goods

Professional Services

Education

Mining

Construction

Retail

Agriculture

Transportation

Relevant Teams

Legal

Corporate Secretarial

Human Resources

Finance

Compliance

Corporate Governance

Board Secretariat

Executive Office

Relevant Roles

Company Director

Independent Director

Executive Director

Non-Executive Director

Company Secretary

Chief Executive Officer

Chief Financial Officer

Head of Legal

Corporate Governance Officer

Board Chairman

Compliance Officer

Human Resources Director

Industries
Companies Act 2016: Primary legislation governing company operations in Malaysia, including provisions for directors' appointment, duties, responsibilities, and remuneration (particularly Sections 230-232 regarding directors' remuneration)
Income Tax Act 1967: Governs the tax treatment of directors' fees and benefits, including withholding tax requirements and tax reporting obligations
Capital Markets and Services Act 2007: Relevant for listed companies, providing requirements for disclosure and governance of directors' remuneration
Malaysian Code on Corporate Governance: Provides guidelines on best practices for directors' remuneration, including recommendation for transparent and fair remuneration policies
Employment Act 1955: Important for distinguishing director fees from employment compensation and ensuring proper classification of payments
Companies (Directors' Fee and Benefits) Regulations: Specific regulations regarding the approval and payment of directors' fees and benefits
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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