The United Kingdom Shareholders Association said that it was surprised to see clauses 195 to 202 in the Bill, but that they are welcome. Did the Government consider abolishing clauses 199 to 206? There is an exception in clause 204 for payments made under a service contract or related to an employment claim. Material contracts must be approved under earlier clauses. Will the Minister put on record why the provisions are required and why the exception for small payments in clause 205 is so low at £200?
I can respond to the hon. Gentleman’s questions on this clause. It defines what is meant by a payment for loss of office for the purpose of the chapter: a payment made to a director or former director to compensate them for ceasing to be a director. It also includes payments for losing
“any other office or employment in connection with the management of the affairs of the company” or subsidiary.
Payments made in connection with retirement as a director or retirement from any other office or employment connected with the management of the affairs of the company or subsidiary are also included. However, payments are included only if the person is a director of the company when the office or employment ceases or if the retirement or loss occurs in connection with the director ceasing to be a director. That is the explanation that I have for clause 199.