A statutory director can be dismissed by the persons who are also authorised to appoint a statutory director. This will be the general meeting of shareholders, or the supervisory board. They can only take a legally valid decision on the dismissal of the statutory director if all legal and statutory requirements have been followed. This includes the method of convocation, the period of notice, the shared agenda, location of the meeting, naming and facilitating the advisory right of the statutory director.
The corporate dismissal of the statutory director, will (subject to exceptions) also lead to the termination of the employment contract. Because of this mechanism, there is no front-end assessment of the dismissal. In many cases, the consequences of the dismissal and the agreements to be made about it are also negotiated with the statutory director. In some cases, a financial agreement has already been made with the statutory director upon entering into the employment contract, a so-called golden parachute.
Unless the statutory director is guilty of culpable conduct, he is also entitled to transition payment under the law. In addition, he may also be entitled to fair compensation. For instance, when there is not sufficient ground for dismissal. If you want to know more about this, please download the white paper below.