Reviewing remuneration on the structure of the calculation and the location of allocation authority, rather than the size of the total, reveals control shifting even where formal approval remains.
Approval can remain while deliberation disappears
The general meeting's approval of a remuneration ceiling is one of the few points at which shareholders reach executive pay. If the ceiling moves into the articles of association as an enabling provision, and the detailed basis of calculation and the authority to allocate move to the board, the approval step formally survives while the thing that used to be deliberated each year does not. The persistence of a procedure is not evidence that control persists.
What the Supreme Court settled
In its decision of 24 April 2025 (case 2025Da210138), the Supreme Court of Korea held that a shareholder who is also a director has a special interest under Article 368(3) of the Commercial Act in a resolution approving the directors' remuneration ceiling, and that the shareholder's voting rights are restricted accordingly. The reasoning is that once a ceiling is set, such a person stands to receive remuneration within it, which establishes a personal interest.
What the ruling strengthened is control, not procedure
The practical consequence is that in a company where the controlling shareholder also serves as a director, that person cannot approve their own remuneration ceiling. However large the stake, the resolution can fail without the assent of other shareholders. What the decision reaches is not the existence of an approval step but whether the approval functions as control.
The same legal instrument can produce opposite effects
Placing the basis for a remuneration policy in the articles is a permitted approach. The question is whether the provision reinforces the general meeting's control function or replaces it. If the basis of calculation and the ceiling are specified and annual deliberation continues, it reinforces. If both the specification and the allocation authority pass to the board and annual deliberation ends, it replaces. The form of the provision is the same; the effect is the reverse.
Examine the structure, not the total
Framed as a question about the size of the total, remuneration review has nothing to compare against except peer levels. Framed as a question about structure, there are things to verify. Is the basis of calculation disclosed. Is the link between performance and reward explained through indicators. Is actual payment against the ceiling published. Are bonuses and retirement payments received outside the ceiling. Is there a clawback provision.
A review sequence
First, check whether an amendment to the articles and approval of a remuneration policy were tabled in the same session. Second, compare what the general meeting will deliberate after the amendment with what it deliberated before. Third, examine the scope of the delegated authority and the independence of the committee exercising it. Fourth, confirm how the votes of director-shareholders were counted.
Read from the company's side, the conclusion differs
The company's account is coherent. Since the ruling, approval has become difficult in practice where the controlling shareholder is a director; placing a remuneration policy in the articles is a permitted method; and the approval step has been changed in form rather than abolished. Whether that account suffices turns on the scope of the delegation and the completeness of the disclosure. A case with no explanation and a case with an insufficient one should not be treated alike.
Limits
This note summarises the reasoning of a decision and the practical questions it raises. It is not legal advice. The legality of any particular resolution and the counting of votes depend on a company's articles and facts, and require confirmation by counsel.