Review of Shareholder Resolutions and Director Compensation

This chapter examines the limits of majority rule in Italian company law and the permissible scope of judicial review of shareholder resolutions, with particular reference to directors’ remuneration. It distinguishes conflicts of interest from abuse of majority power and identifies the company interest, together with the duties of good faith and fair dealing, as the principal constraints on shareholders’ freedom to vote. Particular attention is paid to the evidentiary requirements of majority abuse and to the boundaries of judicial scrutiny, which may encompass the economic rationality and reasonableness of a resolution without amounting to a review of its business merits. Directors’ remuneration provides a paradigmatic illustration: excessive or manifestly disproportionate compensation may constitute either a conflict of interest or an abuse of majority power where it prejudices the company or minority shareholders. The analysis also draws on German law to highlight the relevance of proportionality and reasonableness as criteria of judicial assessment.