The fintech giant Paytm has taken significant steps to strengthen its financial condition and improve governance practices. Recently, the company announced a major decision ahead of its upcoming Annual General Meeting (AGM) scheduled for September 12, 2024. This announcement includes a proposal to reduce the annual compensation for its board of directors.
Commitment to Good Governance
Paytm, through its parent company One97 Communications, stated that it is committed to enhancing financial discipline and ensuring good corporate governance. As part of this commitment, the company is preparing a new salary framework for its board members, which will require the approval of shareholders during the AGM. The proposed structure will set the annual payment for each non-executive independent director at a maximum of ₹48 lakh, including a fixed component of ₹20 lakh.
Details of the Proposed Salary Structure
| Component | Amount (INR) |
|---|---|
| Fixed Component | ₹20 lakh |
| Variable Component | Based on meeting attendance, chairmanship, and committee membership |
| Maximum Annual Payment | ₹48 lakh |
Additionally, the variable component will be determined based on factors such as attendance at meetings, chairmanship roles, and membership in various committees. The aim is to ensure adherence to good governance practices within the organization. This revised salary structure is expected to take effect from April 1, 2024.
Informed Decision Making
Paytm’s decision regarding the new salary structure has been informed by benchmarking against peer companies with similar market capitalizations and operating within the same sector. This strategic move reflects Paytm’s awareness of market standards and its intention to align itself accordingly.
Current Salaries of Board Members
As it stands, the annual salaries for Paytm’s non-executive independent directors are notably high, with Ashit Ranjit Lilani receiving ₹1.65 crore and Gopal Samudram Srinivasanaraghavan Sundararajan earning ₹2.07 crore. The proposed changes indicate a shift toward a more sustainable compensation model, reflecting the company’s commitment to responsible governance.
Conclusion
In conclusion, Paytm’s initiative to revise the compensation of its board members showcases its dedication to enhancing financial stability and governance practices in an increasingly competitive market. By instituting a more balanced salary structure, Paytm aims to reinforce its commitment to good corporate governance while positioning itself favorably within the fintech landscape.
