How Much Profit are Directors Entitled to?

How Much Profit are Directors Entitled to?

It depends on how much they contribute to a business

By Marcia Smith

Company directors will typically be awarded profits in the form of a dividend or salary on a level that’s commensurate with the size of their stake in the business and the amount of time they devote to its operation – as with any employee, really.

The amount of profit that company directors are entitled to is decided by a company’s shareholders and the board of directors. Typically, the board of directors, on the advice of the finance director, will examine a company’s annual accounts and decide on director remuneration based on the performance of the business over the past 12 months of trading.