Document background
The Director Profit Sharing Agreement is a crucial document used in Saudi Arabian companies to establish a performance-based compensation structure for directors that aligns with both corporate objectives and regulatory requirements. This agreement is particularly relevant when companies wish to incentivize directors through profit-sharing mechanisms while ensuring compliance with Saudi Companies Law, Capital Market Authority regulations, and Shariah principles. The document typically becomes necessary during director appointments, corporate restructuring, or when implementing new compensation schemes. It addresses key aspects such as profit calculation methodologies, payment terms, performance metrics, and regulatory compliance requirements, while providing necessary safeguards for both the company and the director.
