A settlement agreement (VSO) is often used to terminate employment contracts. But for a director or statutory director, different rules apply than for ordinary employees. Dismissal in these positions is often more complex and the consequences are greater.

In this article we explain what the differences are, what you should pay attention to and how you as a director can negotiate the best conditions.

Difference between employee and statutory director

An ordinary employee can only be dismissed via a VSO, UWV or cantonal court. For a statutory director this is different:

• The decision to dismiss is made by the general meeting of shareholders (AVA) or the supervisory board.

• This decision usually ends both the management position and the employment contract immediately.

• Additional provisions often apply in the statutes or in the employment contract.

Consequences of dismissal for a director

• You lose your position as director and your employment contract at once.

• Prohibitions on notice often do not apply (for example, in the event of illness).

• Your position is more vulnerable because shareholders or commissioners can intervene faster.

VSO for a director or director: additional points of attention

1. Severance pay

   • In addition to the transition compensation, you can often negotiate an additional exit arrangement.

   • Think about additional monthly salaries, bonuses or buying off stock options.

2. Notice period

   • Ensure that the statutory or contractual notice period is applied correctly to secure WW rights.

3. Non-competition and relationship clause

   • These clauses are often stricter for directors.

   • Limit them or compensate for them.

4. Reputation and communication

   • Agree on a neutral reason for dismissal (“difference of opinion” or “in good consultation”).

   • Make agreements about internal and external communication.

5. Shares and options

   • If you have shares or options, it must be arranged in the VSO what will happen to them.

6. Legal cost reimbursement

   • In the case of directors, it is often about higher amounts; get your legal costs fully reimbursed.

Examples from practice

• Example 1: A statutory director was dismissed due to a “difference of opinion”. Thanks to negotiations, he received an exit arrangement of 12 months’ salary and a positive press release.

• Example 2: A director did not only lose his job but also his stock options. After legal assistance, he received compensation for the loss of these options.

• Example 3: A director signed a VSO without attention to the non-competition clause. As a result, he was unable to work in the same sector for a year and missed major income.

Checklist: VSO for director or director

• 📄 Check the reason for dismissal and establish neutral communication.

• 💶 Negotiate an exit arrangement in addition to the transition compensation.

• 📅 Pay attention to the notice period in connection with WW rights.

• 🔒 Look at clauses and stock options.

• ⚖️ Have the VSO checked by a lawyer with experience in director’s cases.

Frequently Asked Questions (FAQ)

1. Can a statutory director always be dismissed just like that?
Yes, the AVA can dismiss a director. However, there may be a severance payment.

2. Do I have a right to WW after dismissal as a director?
Yes, provided that the VSO is correctly drafted and the notice period is followed.

3. What about my shares or options?
That must be explicitly arranged in the VSO.

4. Can I get a higher compensation than an ordinary employee?
Yes, especially because directors are often more vulnerable, a higher exit arrangement is defensible.

5. Why is communication important?
A neutral reason for dismissal and agreements about communication protect your reputation.

Why Arslan Advocaten?

• Specialized in employment law and company law

• Experience in assisting directors and directors in dismissal

• Negotiating for generous departure arrangements and reputation protection

• Ensuring that WW and tax rights are safe

Conclusion

For directors and statutory directors, special rules and risks apply in a VSO. Therefore, always get legal guidance. With the right negotiations, you can not only reach a good financial arrangement, but also safeguard your reputation and future.