Under Singapore corporate law, in the absence of express stipulation in the articles of association, the mere holding of the office of director without more does not entitle a director to remuneration.
The law treats the director as trustee and equity forbids a trustee to make a profit out of his trust. The strict rule of equity may be relaxed by the articles which almost invariably provide that the director’s remuneration be determined from time to time by the company in general meeting (Article 70, Table A).
Directors are compensated in two ways with approval by either the General Meeting or the Board of Directors depending on the type of compensation:
- Director’s fees paid to a director as a director: Under business law in Singapore, payment for being a director is regulated by section 169(1) of the Companies Act which provides that a company cannot provide or improve emoluments for a director in respect of his office unless the provision is approved by a resolution in General Meeting that is not related to other matters.
- A salary or fee paid to a director who is an employee or who provides some other non-directorial service to the company: Does not need to be approved at General Meeting according to section 169 of the Companies Act but must be approved by the Board of Directors.