Company Directors are not, by virtue only of their office as Director, automatically entitled under company law to Remuneration for services as a director or to reimbursement of expenses incurred in rendering such services. Power to pay directors remuneration for their services will need to be conferred by the constitution of the company. A director may also be contractually entitled to remuneration by virtue of an agreement or arrangement with the company.

When considering the position in relation to the remuneration of a director under the Companies Act 2006 (CA 2006) and a company's articles of association, and how this relates to the remuneration provisions in directors’ service contracts and other contractual arrangements, it is important to note the distinction between:

1. •

   a director's entitlement to remuneration (usually referred to as directors' fees) and reimbursement of expenses under the articles of association of the company, and

2. •

   a director's contractual entitlement to remuneration by virtue of an agreement or arrangement with the company, most commonly a service contract (ie a contract of employment), a contract for services or a letter of appointment