How does Section 230 differ for public versus private companies regarding director bonuses?

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Section 230 of the Companies Act 2016 distinguishes between public and private companies concerning the approval of directors' fees and benefits, including bonuses.

For public or listed companies and their subsidiaries, any fees or benefits payable to directors must receive approval at a general meeting, as stipulated by Section 203(1)(a) and (b). Failure to comply constitutes an offence, potentially leading to a fine of up to RM3,000,000, with any contravening payments considered a debt owed by the directors to the company under Section 230(6). In contrast, private companies, such as TH Properties, have a different framework. Under Section 230(2), the Board of Directors can approve directors' fees and benefits, provided it aligns with the company's constitution.
Approval Process for Private Companies

In private companies, when the Board of Directors approves directors' fees or benefits, this decision must be minuted. Furthermore, the Board is obligated to inform shareholders of this approval within 14 days of the decision date, as outlined in Section 230(3). This transparency requirement ensures shareholders are aware of such remuneration decisions made by the board.
Shareholder Rights in Private Companies

Even with board approval for remuneration in private companies, shareholders holding at least 10% of the total voting rights have recourse. If they believe a payment is not fair to the company, they can demand a resolution to approve the payment within 30 days of becoming aware of it, either through a written resolution or at a general meeting, as per Section 230(4).
Consequences of Non-Compliance

Should a private company or its officers contravene these provisions regarding director remuneration, they commit an offence punishable by a fine not exceeding RM250,000 upon conviction, according to Section 230(7). Moreover, unless a required approval is obtained through a resolution, any payment made will be treated as a debt owed by the director to the company, as stated in Section 230(5).

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How does Section 230 differ for public versus private companies regarding director bonuses?

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