On April 16, 2020, Belgium adopted the law transposing the Shareholder Rights Directive II1 ("SRD II Law"), almost one year after the ultimate transposition deadline of the directive.

SRD II adds to the framework initially established by the Shareholder Rights Directive I 2 and provides in essence for: (i) enhanced involvement of shareholders in companies' remuneration policy; (ii) rules regarding transactions with related parties; (iii) an institutionalized way through which companies can identify their shareholders; and (iv) transparency obligations applicable to institutional investors, asset managers and proxy advisors.

  • The remuneration policy will be separate from the "remuneration report", and become subject to a binding vote by the shareholders' meeting.
  • The remuneration report will be subject to enhanced content and disclosure requirements, while remaining subject to a non-binding vote by the shareholders' meeting. Among other things, the scope of individual disclosure is extended, and will cover directors, members of the supervisory board and management board and daily managers.
  • The rules on related party transactions will have an extended scope of application and cover transactions with a "related party" within the meaning of IAS 24. Companies will also have to publicly disclose these transactions, at the latest when the decision is taken or the transaction is concluded.
  • Listed companies will have the right to ask intermediaries for identification of their shareholders. In addition, intermediaries will be required to facilitate the exercise of shareholder rights, for instance by transmitting information between the company and its shareholders.
  • Institutional investors, asset managers and proxy advisors are subject to additional transparency obligations.

The SRD II Law brings a variety of changes to the Code of Companies and Association ("CCA"), the law of May 2, 2007 on the disclosure of major holdings in issuers whose shares are admitted to trading on a regulated market ("Transparency Law"), and sector-specific financial laws. In general, the legislator opted for a faithful transposition of SRD II and, in the areas where SRD II granted discretion to the Member States, chose continuity based on policy choices that had already been made in the past. 3

This alert memorandum addresses the main changes for Belgian listed companies introduced by the transposition of SRD II, plotted against the background of the pre-existing legal framework.


Directors' remuneration has long been an area of focus in corporate governance and shareholder engagement debates since it is considered to be one of the key instruments for companies to align their interests and those of their directors and executives.

While a legal framework governing remuneration reports has existed in Belgium since the corporate governance law of April 6, 2010, the SRD II Law strengthens the framework by introducing a binding vote on the remuneration policy and requiring more granular disclosure in the remuneration report. It does not introduce any changes to the substantive rules on remuneration.

A. Remuneration policy

Under the new regime, listed companies must establish a remuneration policy, and submit it to a vote by the shareholders' meeting. Under the current CCA rules, the remuneration policy already is subject to a shareholders' vote, but only indirectly as part of the annual vote on the remuneration report, and on a nonbinding basis.

  • Scope. The remuneration policy should cover directors, members of the supervisory board and management board, other executives (i.e., "members of a committee where the general management of the company is discussed") and daily managers. Although the shareholders' meeting does not have the power to determine the remuneration of the members of the management board, executives and daily managers, via its vote on the remuneration policy, it will indirectly be able to weigh in.
  • Components. As a general matter, the remuneration policy should contribute to the company's strategy, long-term interests and sustainability. An overview of the remuneration policy's components is set out in the summary table on the next page, highlighting those that are new.
  • Nature and frequency of the vote. The remuneration policy will be submitted to a separate vote by the shareholders' meeting (simple majority; no quorum) each time there is a material change4 , and at least every four years.
    The legislator opted to make the vote by the shareholders' meeting "binding" (under SRD II, the vote also could have been advisory), meaning that companies may only pay remuneration to the relevant persons in accordance with a remuneration policy that has been approved by the shareholders' meeting. If the policy is not approved, and there is no previously approved remuneration policy (which will be the case as long as the shareholders' meeting has not yet approved the remuneration policy pursuant to the SRD II Law), companies may continue to apply their past remuneration practice. If the policy is not approved, but there is an approved remuneration policy in place, such remuneration policy will continue to apply. If the remuneration policy is rejected by the shareholders' meeting, companies must submit a revised remuneration policy to the next shareholders' meeting.


1. Directive (EU) 2017/828 of the European Parliament and the Council of May 17, 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement ("SRD II").

2. Directive 2007/36/EC of the European Parliament and of the Council of July 11, 2007 on the exercise of certain rights of shareholders in listed companies.

3. The SRD II Law also makes certain technical amendments to the CCA, which are not covered by this alert memorandum.

4. As "material change" is not defined in the SRD II Law, the company should assess what constitutes a material change based on the comprehensive remuneration framework of the company

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Originally Published 23 April, 2020

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.