Can a Director Award Themselves a Bonus?
The director of an enterprise cannot unilaterally issue and sign an order for their own bonus unless such a right is explicitly provided for in the founding documents, employment contract, or a decision by an authorised body.
As reported by the State Labour Service, since the director is a hired employee, the decision to pay them a bonus must be made by the enterprise's owner, founder, or another management body vested with the appropriate powers. These may include the general meeting of participants, the supervisory board, or another body defined by the founding documents.
Only after such a decision has been made can an order be issued to pay the director a bonus.
However, legislation allows for exceptions. If the enterprise's founding documents or the contract with the director explicitly provide for their right to independently determine the amount and procedure for paying their own bonus, the possibility of issuing such an order is assessed taking these provisions into account.
As previously reported by «Judicial-Legal Newspaper», employer payment of employee insurance has long been used as a social tool for motivating personnel. However, in practice, such payments often raise questions regarding taxation and the completion of tax reports.
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