Remuneration for a member of the Management Board in Poland

From this article, you will learn:

• what the remuneration of a management board member looks like from the formal and organisational point of view?
• whether a member of the management board is entitled to employee privileges?
• which bodies are responsible for appointing a member of the management board and a member of the supervisory board?

A member of the management board or supervisory board of a Polish company performs his duties (with or without remuneration) on the basis of the appointment letter. The terms of cooperation and remuneration may result from the resolution of the relevant company body or be specified in a separate agreement. It may be either an employment contract or a management contract.

Appointment and employment of a management board member

Appointment is an organisational relationship connecting a member of the management board with the company. Its consequence may be the establishment of an additional obligatory relationship in the form of an employment contract or a civil law contract.

As a rule, in a limited liability company a member of the management board or supervisory board is appointed by the shareholders' meeting. In a joint-stock company, a member of the management board is appointed by the supervisory board, and a member of the supervisory board is appointed by the general meeting of shareholders. Member of the management board of a limited liability company and joint-stock company may be revoked at any time, which, however, does not deprive him of claims arising from a parallel employment relationship or other legal relationship. The resolution of the competent authority on the appointment of a member of the management board may also include a provision regarding the principle of remunerating members for the function they perform. 

Contract of employment

Regardless of the act of appointment (and thus establishing an organisational relationship between the company and a member of the management board), a member of the management board may be employed in the company on the basis of an employment contract. The employment relationship gives him protection under the provisions of the Labour Code (e.g. fixed remuneration, the right to paid holiday leave). The Labor Code allows for the conclusion of a fixed-term contract with a member of the management board – an employment contract for a specified period of time in order to perform work during the term of office.

Attention! An employment relationship cannot be concluded with a sole-shareholder limited liability company if the sole shareholder is also a member of the management board. In the case of multi-person companies, the prevailing view in Polish jurisprudence is that there are no contraindications to employing a partner who is a member of the management board under an employment contract.

Civil law contract – management contract

A management contract (also referred to as a contract on management or management agreement) is a civil law contract to which the principle of freedom of contract applies. A management contract has some similarities to a mandate contract – it is characterized by the independence and independence of the Contractor's actions, while the detailed terms of cooperation are regulated by the parties to the contract.

What contract with a management board member is the most advantageous and what is the taxation of the remuneration?

Each of the above-mentioned forms of cooperation with a management board member has different effects in terms of taxation and social security law – both for the company and for the management board member himself. For this reason, we encourage you to read our entries and contact specialists. We will be happy to support you in selecting the most appropriate form of cooperation with a member of the management board.