Board Resolution Fixing the President's Salary Template

In plain language: States the date, time, and place of the board meeting (or confirms action by written consent), identifies the directors present, and confirms that a quorum was achieved.

Common mistake: Omitting the quorum confirmation. If challenged, a resolution without a quorum recital may be declared invalid, making any salary paid under it an unauthorized corporate expenditure.

In plain language: References the corporate bylaw or statutory provision that empowers the board to fix officer compensation, establishing the legal basis for the resolution.

Common mistake: Citing a bylaw article that doesn't match the current bylaws. When the bylaws have been amended, outdated article references undermine the resolution's authority and can flag compliance issues during audits.

In plain language: Names the individual holding the president title, confirming their appointment to the role to connect the compensation decision to a specific officer.

Common mistake: Using only a job title without a full legal name. If the president changes mid-year, a title-only reference creates ambiguity about who is actually authorized to receive the salary.

In plain language: The operative clause — states the exact annual or periodic salary amount and the payment frequency (weekly, bi-weekly, semi-monthly, or monthly).

Common mistake: Stating only an annual figure without specifying payment frequency. Payroll systems require a per-period amount, and ambiguity about frequency can create discrepancies between the resolution and actual payroll records.

In plain language: Specifies the calendar date from which the approved salary applies, ensuring the resolution is anchored to a defined pay period start date.

Common mistake: Leaving the effective date blank or using 'immediately.' An undefined effective date creates disputes about which payroll period is covered and complicates retroactive tax filings.

In plain language: Records that the board has considered the reasonableness of the compensation relative to market rates and the president's duties, supporting the deductibility of the expense.

Common mistake: Omitting the reasonableness finding entirely. Without documented evidence of a reasonableness analysis, the IRS or CRA may reclassify excess salary as a non-deductible distribution, triggering back taxes and penalties.

In plain language: Directs the appropriate officers — typically the CFO, treasurer, or controller — to take all steps necessary to carry out the approved compensation, including payroll adjustments.

Common mistake: Naming a specific officer to implement the resolution who no longer holds that role. If the named officer has left, the resolution may require amendment before payroll can act on it.

In plain language: The corporate secretary certifies that the resolution was duly adopted, that the signatories are directors, and that the document is a true copy of the board's action.

Common mistake: Having the president — rather than the secretary — certify a resolution that sets the president's own salary. Self-certification of one's own compensation record is a governance red flag and may be challenged by minority shareholders or auditors.

In plain language: Signature blocks for each director voting in favor, or for all directors if the resolution is adopted by written consent in lieu of meeting.

Common mistake: Collecting signatures on separate undated pages and then assembling them into a single document without a counterparts clause. Without explicit counterparts language, the validity of a multi-page consent assembly can be disputed.

A board resolution fixing the president's salary is a formal written decision by a corporation's board of directors that officially approves the compensation payable to the president. It records the salary amount, payment frequency, and effective date, and provides the corporate authorization required before payroll can lawfully make payments at that rate. It is filed in the company's minute book as a permanent governance record.

In most jurisdictions, corporate bylaws require the board to authorize officer compensation before it is paid. Without a resolution, salary payments to the president lack formal corporate authorization and may be treated as unauthorized distributions, creating personal liability for the officers who approved payroll. Lenders, auditors, and tax authorities routinely request the resolution as proof of authorization.

In most jurisdictions, a director who is also the president has a conflict of interest in a vote on their own compensation. Best practice — and in some jurisdictions, a statutory requirement — is to have the interested director recuse themselves and let the remaining independent directors vote. In a single-director corporation where the president is the only director, the decision is technically valid but should be documented carefully and reviewed by counsel to protect against challenge.

Tax authorities, particularly the IRS in the US and the CRA in Canada, apply a reasonableness standard to officer compensation deducted as a business expense. Reasonable compensation is generally what a similarly qualified person would receive for the same services in an arm's-length transaction. Supporting documentation — market salary surveys, industry benchmarks, and a board-level reasonableness finding in the resolution — strengthens the deductibility of the expense and reduces audit risk.

Yes. Most corporate statutes permit directors to adopt resolutions by written consent in lieu of a meeting, provided all directors (or in some jurisdictions, the required majority) sign the written consent. Check your specific bylaws and applicable corporate statute to confirm whether unanimous or majority consent is required and whether electronic signatures are acceptable.

The signed original should be filed in the corporation's official minute book — a physical or electronic binder containing all resolutions, meeting minutes, share registers, and constitutional documents. A certified copy should be provided to the payroll department and the company's accountant. Most corporate statutes require minute books to be kept at the registered office and available for inspection by directors and shareholders.

A new board resolution must be adopted to authorize the changed amount. The new resolution should reference the prior resolution, state the revised salary, and specify a new effective date aligned with a pay-period start. The payroll department should not implement the change until the signed resolution is on file. Both resolutions should be retained in the minute book.

Notarization is not typically required for a standard board resolution in most North American and UK jurisdictions. However, some banks, foreign counterparties, or government agencies may request a notarized or apostilled copy as part of their verification process. If the resolution will be used in a cross-border transaction, confirm the target jurisdiction's requirements before finalizing the document.

In many jurisdictions, a corporation with a single director can act by resolution of that one director, who constitutes the entire board and therefore a quorum. The resolution should state that the sole director is the sole member of the board and that quorum is accordingly met. Because the sole director is typically also the president, the self-dealing concern is heightened — thorough reasonableness documentation and an annual review by an accountant or lawyer are strongly recommended.