Jersey: Court of Appeal upholds director's entitlement to exit payments

In AI Airports International Ltd. and PI Power International Ltd. v Pirrwitz [2013] JCA177 the Court of Appeal upheld a decision of the Royal Court that a former director of two companies was entitled to exit payments on his removal from office. The decision is an important one on directors' duties and in particular the ability of directors to approve remuneration including exit payments. Nugee JA noted (at para. [85]):

In the present case the Royal Court concluded, having heard the evidence, that the reason for the exit payments was to secure the loyalty and independence of the directors. This is undoubtedly a proper purpose of the power of the Board to fix remuneration ... The fact that in certain circumstances the exit payments might have been payable when the recipients might well be thought to be undeserving of them – circumstances that did not in fact occur – does not in my view invalidate the directors’ decision to authorise the Service Contracts in the form in which they did".