Somewhat hidden in the Act of 3 September 2017 concerning non-financial information, a new obligation to file a remuneration report together with the annual accounts at the Central Balance Sheet Office of the National Bank of Belgium was imposed on companies controlled by the Government or by public-law legal entities. We have noticed that not all companies are aware of this new obligation. In many cases, however, it is not too late to become compliant.

The Act of 3 September 2017 concerning the disclosure of non-financial information and information regarding diversity by certain large companies and groups (Official Gazette 11 September 2017) contains, apart from provisions transposing Directive 2014/95/EU, a new obligation for companies over which the Government or public-law legal entities exercise control. The new article 100, §1, 6°/3 of the Companies Code obliges such companies to file a remuneration report together with the annual accounts at the Central Balance Sheet Office of the National Bank of Belgium. 

The scope of the obligation is determined by the concepts of Government and control. The concept of Government includes the State, the Regions, the Communities, the provinces, the municipalities, inter-municipal associations and public institutions. "Public institutions" refers to institutions with legal personality pursuing the public interest which are established or recognised by the Government and are subject to the financial and administrative control of the public authorities.

For the concept of control, the new statutory provision refers to article 5 of the Companies Code: the power de iure or de facto to exercise a decisive influence on the appointment of the majority of the directors or managers or on the orientation of the management policy. This is the common concept of control, which is therefore not limited to holding the majority of the voting rights but can also exist on other (e.g. contractual) grounds or can even be purely factual. Joint control is also control. This means that the obligation also applies, for example, even when the Government only holds a minority interest but has a finger in the pie for making important policy decisions based on a shareholder agreement or a specific legal regime. Moreover, indirect control exercised through a subsidiary is also considered as control. Hence, the new rules apply downstream to all (Belgian) companies which are directly or indirectly controlled by the Government. 

This remuneration report is, however, much more limited than the traditional remuneration report for (amongst others) listed companies as set out in article 96, §3 of the Companies Code. It only covers the remuneration of the directors with respect to their mandate as director. More specifically, the report has to give an overview on an individual basis of the amount of all remuneration, in cash as well as in kind, granted directly or indirectly by the company or a company within its scope of consolidation, to the directors for their mandate as a member of the board of directors. Consequently, other remuneration the director might receive as an employee or in the context of a management agreement is not covered. 

The scope ratione personae of these new rules is very broad. They apply to a broad range of companies of various types. Furthermore, the rules apply as of the financial statements for the accounting year 2017 (or the accounting year starting in 2017). In other words, the remuneration report has to be filed with the National Bank of Belgium within 30 days of the approval of the annual accounts for 2017. We have noticed that, in practice, not all companies concerned are aware of this new obligation. In many cases, it is not too late to become compliant. From a literal reading of the statutory obligation, this specific remuneration report does not have to be approved by the general meeting or audited by the statutory auditor as such. It has to be made available to the shareholders before the annual general meeting like the other documents mentioned in article 100 of the Companies Code.