The recently adopted Law No. 1255-VII, which came into force on June 01, 2014, introduced a new level of corporate security for shareholders in Ukraine and provided them with additional instruments of corporate control.
The most significant change brought by the new Law is the introduction of a new reason for termination of employment of a CEO. Thus, the CEO, as well as members of executive and controlling bodies of the company, may now be dismissed due to revocation of their powers. No additional grounds for termination of the CEO’s employment are required.
Therefore, the shareholders’ decision to revoke the powers of the CEO is an independent and reasonable ground for terminating the employment of this CEO.
However, in such case the CEO should receive severance pay in the amount of six months’ salary.
The powers of the CEO may also be temporarily suspended at any time by the decision of the shareholders without any additional grounds.
Ius Laboris newsletter, June 2014
Author: Oksana Voynarovska, Valeriya Savchuk