Turkish Company Pays Excessive Salaries or Bonuses to a Partner: Can Minority Shareholders Challenge Them? – 2026 Updated Guide

Can Minority Shareholders Challenge Excessive Salaries in Turkey?

Learn how minority shareholders can challenge excessive salaries or bonuses paid to a partner in a Turkish company, including evidence, injunctions, and compensation claims.

A Turkish company may pay salaries, bonuses, management fees, or other benefits to a shareholder who actively works for the business. However, payments may become legally problematic when they are excessive, unsupported, concealed, or designed to transfer company profits to a controlling partner.

Minority shareholders may suspect abuse when the company reports low profits despite strong revenue, stops distributing dividends, makes unexplained payments to a partner, or records unusually high executive expenses. In such cases, the minority shareholder may have corporate, commercial, and compensation remedies.

The legal assessment depends on the company type, the partner’s role, the approval process, the market value of the services, and the financial damage suffered by the company.

Are Excessive Salaries or Bonuses Automatically Unlawful?

No. A high salary or bonus is not automatically illegal. A partner may have specialist qualifications, significant responsibilities, or an employment agreement that justifies substantial remuneration.

The payment becomes questionable when the partner performs little or no genuine work, receives amounts far above market rates, obtains bonuses without meeting performance conditions, or receives benefits without proper corporate approval.

Other warning signs may include payments made without a written agreement, retroactive bonuses, repeated cash withdrawals, payments to family members, unexplained consultancy fees, or compensation approved by persons who also benefit from the transaction.

The company should assess whether the payment was commercially justified and whether the decision complied with the articles of association, shareholders’ agreement, employment contract, and internal approval procedures.

When Can Minority Shareholders Challenge the Payments?

Minority shareholders may challenge payments where they appear to involve abuse of control, breach of management duties, unequal treatment, concealment, or damage to the company.

A challenge may be relevant if the controlling partner uses voting power to approve personal benefits while preventing ordinary shareholders from receiving dividends. It may also be relevant if the payment reduces the value of minority shares or is used to disguise a distribution of profits.

The fact that a minority shareholder disagrees with the amount is not always sufficient. The shareholder should establish objective indicators such as comparable executive salaries, the partner’s actual duties, the company’s financial performance, the approval process, and the connection between the payment and the resulting loss.

What Information Can Minority Shareholders Request?

The first legal and practical step is usually to obtain information about the payments. Depending on the company structure and applicable corporate procedures, a minority shareholder may request access to financial statements, accounting records, board decisions, salary agreements, bonus policies, and related-party transactions.

The shareholder may also ask how the payment was calculated, whether the partner performed the relevant services, whether an independent assessment was obtained, and whether the payment was approved by the competent corporate body.

If the company refuses to provide information or gives incomplete explanations, that refusal may become relevant in later corporate proceedings. A lawyer can determine which documents may be requested directly and which may require an expert review or court application.

Can Excessive Payments Be Treated as Hidden Profit Distribution?

In some cases, excessive compensation may function as a disguised transfer of profits. Instead of declaring dividends to all shareholders, the controlling partner may receive a large salary, bonus, consultancy fee, company vehicle, loan, or other benefit.

This distinction is important because a genuine salary is normally connected to actual work and responsibility, while a disguised distribution may be unrelated to services provided.

The investigation should compare the payment with the partner’s duties, working hours, qualifications, market compensation, company performance, and the benefits received by other managers. The accounting treatment, tax records, payroll documents, and payment timing may also help clarify the transaction’s real purpose.

Can a Director Be Personally Liable?

If the partner is also a director or manager, personal liability may arise where they approve excessive compensation for themselves, conceal the payment, misuse corporate authority, or cause measurable damage to the company.

A director is expected to act with care and loyalty and to avoid using corporate power for an improper personal benefit. A conflict of interest should be disclosed and handled through the appropriate approval process.

Personal liability is not automatic merely because the director received a salary or bonus. The company or claimant must generally establish the wrongful conduct, the damage, and the causal connection between the two.

Can Minority Shareholders Claim Compensation?

The primary financial loss usually belongs to the company if company funds were improperly paid to a partner. In that situation, the company may seek repayment, damages, or recovery of the unauthorized benefit.

A minority shareholder may be able to initiate or support a director-liability claim on behalf of the company, depending on the company type, ownership structure, and procedural requirements. The shareholder may also have a direct claim if their personal rights were independently violated.

The shareholder should not automatically treat a reduction in share value as a personal claim. A decrease in the value of shares may be a consequence of damage to the company and may need to be pursued through corporate remedies.

Can Shareholders Challenge a Corporate Resolution?

If salaries or bonuses were approved by a board or general assembly decision, the validity of that decision may be examined.

A challenge may be considered where the resolution violated mandatory legal rules, the articles of association, voting procedures, equal-treatment principles, or the company’s interests. A resolution may also be questioned if shareholders were misled, relevant information was concealed, or the decision was adopted solely to benefit the controlling partner.

The time limits and procedural requirements for challenging a corporate resolution can be strict. A minority shareholder should obtain the resolution, meeting notice, voting record, attendance list, and supporting documents without delay.

Can an Injunction Stop Future Payments?

An interim court measure may be requested where there is a serious risk that excessive payments will continue or company assets will be transferred before the dispute is resolved.

The requested protection may concern future bonuses, specific payments, company accounts, related-party transfers, or the disposal of company assets. The court will assess the urgency, evidence, proportionality, and potential harm.

An injunction is not guaranteed. A request should be supported by concrete evidence showing the payment pattern, the absence of proper approval, the financial risk, and the likelihood of continuing damage.

What Evidence Should Be Preserved?

Important evidence may include employment agreements, salary schedules, payroll records, bonus policies, board minutes, shareholder resolutions, bank statements, accounting entries, tax documents, company budgets, performance reports, and e-mail correspondence.

Market comparisons can be particularly important. Information about compensation paid to employees with similar duties, independent management salaries, sector standards, and the partner’s actual contribution may help establish whether the payment was commercially reasonable.

Electronic evidence such as online banking records, accounting software logs, digital signatures, corporate e-mail, and messaging applications may show who approved or instructed the payments. Records should be preserved in their original form and obtained lawfully.

What Can Foreign Minority Shareholders Do from Abroad?

A foreign minority shareholder can generally appoint a Turkish lawyer through a power of attorney. The document may be issued before a consulate or a local notary and may require legalization, apostille, and an official translation.

A lawyer can review company records, request information, communicate with directors, investigate related-party payments, obtain expert assistance, challenge corporate resolutions, and pursue compensation or interim measures.

Lawyer Fırat Fesih Kaya assists foreign shareholders with minority rights, director liability, corporate investigations, excessive remuneration disputes, and recovery claims.

2026 Legal Considerations

In 2026, digital payroll, accounting, banking, e-invoice, electronic signature, and corporate e-mail records are increasingly important in remuneration disputes. These records may reveal when payments were approved, who benefited, and whether the accounting description accurately reflected the transaction.

Companies should maintain written salary policies, performance criteria, conflict-of-interest procedures, approval controls, and documentation for related-party compensation. Minority shareholders should investigate unexplained benefits before the company’s financial records are changed or relevant employees leave.

Tax, payroll, social security, and corporate-law issues may arise together. A complete review should therefore consider the commercial purpose of the payment as well as its accounting and regulatory treatment.

Frequently Asked Questions (FAQ)

1. Can minority shareholders challenge a partner’s excessive salary in Turkey?

Yes, if the payment is unsupported, abusive, improperly approved, concealed, or harmful to the company. The available remedy depends on the company structure and evidence.

2. Is a high bonus automatically illegal?

No. A high bonus may be lawful if it is based on genuine performance, a valid agreement, proper approval, and commercially reasonable criteria.

3. Can a partner pay themselves a salary from the company?

A partner may receive compensation for genuine work, but the payment should have a proper legal basis, be accurately recorded, and comply with corporate approval requirements.

4. Can excessive salary payments be treated as hidden dividends?

Potentially. If the payment is unrelated to actual work and primarily transfers profits to one partner, it may be examined as a disguised benefit or improper profit distribution.

5. Can a minority shareholder demand repayment from the partner?

The company may seek repayment or damages. A shareholder’s ability to bring a claim directly depends on the legal basis, company structure, and nature of the loss.

6. What evidence proves that a salary is excessive?

Employment contracts, payroll records, market comparisons, performance documents, board resolutions, bank statements, accounting records, and evidence of the partner’s actual work may be relevant.

7. Can shareholders cancel a resolution approving the bonus?

A corporate resolution may be challenged if it violates law, company documents, voting rules, equal-treatment principles, or the company’s interests.

8. Can an injunction prevent future bonus payments?

An interim measure may be available where there is an urgent risk of continuing financial harm or unauthorized transfer of company assets.

9. Can a foreign shareholder investigate the payments without traveling to Turkey?

Usually, a foreign shareholder can appoint a Turkish lawyer to request records, investigate the transaction, and pursue appropriate proceedings under a valid power of attorney.

10. Can the director be personally liable for approving their own excessive compensation?

Yes, personal liability may arise if the director breached management duties, concealed the conflict, acted outside authority, or caused measurable damage to the company.

This article is provided for general informational purposes only and does not constitute legal advice. We recommend consulting a lawyer about your specific circumstances to avoid any loss of rights.

Expert Legal Support for Excessive Salary and Bonus Disputes

Expert legal support is essential to avoid loss of rights. By working with a lawyer experienced in minority shareholder rights, excessive compensation disputes, director liability, related-party transactions, corporate investigations, and recovery claims, serving clients throughout Turkey and internationally, you can protect your legal interests.

Fırat Fesih Kaya Law Office provides professional legal support to minority and foreign shareholders facing excessive salaries, unlawful bonuses, hidden profit distributions, corporate abuse, director misconduct, and compensation disputes.

Phone: +90 312 434 22 22
Mobile/WhatsApp: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No:221, Yildirim Tower No:148, Balgat, Cankaya, Ankara, Turkey