Revocability ad nutum, social directors, public limited companies, board of directors, revocation, company law, French law, legitimate reasons, removal of directors, golden parachutes
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Abstract
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Abstract
The 1966 law allows for the revocation of social directors, particularly general managers of public limited companies, at any time by the board of directors.
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[...] Context : (Social Directors. Revocability 'ad nutum', Limiting Clause, Nullity - Didier Danet - Claude Champaud) ? The 1966 law consecrates the principle of revocation ad nutum of social directors, particularly general managers of public limited companies, who can be revoked at any time by the board of directors on the proposal of the president. This principle of public order cannot be circumvented by contractual agreements. ? While, in theory, all social directors are exposed to this insecurity, it is especially the general managers, often external to the capital, who suffer the most. [...]
[...] Their only means of securing their position remains control of the capital. - This judicial rigor is however criticized, some authors estimating that it is disconnected from modern managerial realities and the needs of stability of the leaders. Class Notes Principle : revocation at will of the leaders (brutal) very strong principle. ? Problem with golden parachutes: in principle, not forbidden. This is a question that the Cour de cassation leaves to the judges of fact (because it is a very concrete assessment). [...]
[...] In return, the latter undertakes, by a separate deed, to appoint the assignor as deputy general manager and to ensure his continued employment until March at the risk of paying him an indemnity equivalent to his salary multiplied by the number of remaining months. Appointed in accordance with the commitments made, the assignor is dismissed in January 1987 by the board of directors. He then sues the chairman for payment of the indemnity provided for. Procedure : The appeals court considers that the latter personally undertook to pay a premium and validates this commitment. Question : Is a convention that infringes the principle of revocability ad nutum of the directors of a joint-stock company valid? [...]
[...] humiliation of the removed director). ? However, a doctrinal and jurisprudential attempt has emerged to to mitigate the effects of this revocability by allowing for prior contractual compensation. - Firstly, it traditionally admits that the exercise of the right of removal, if it is free, must not be abusive. - A compensation can be granted to the manager if the removal was accompanied by a desire to humiliate or chastise him, particularly by designating him to the vengeance of his former collaborators and subordinatesCom Oct. [...]
